How Banks Can Bridge The Data Sharing Privacy Gap

Consumers have become enamored of digital banking’s conveniences, especially as the technologies underpinning them make it easier than ever to share data and receive personalized insights into spending or new products. Open banking initiatives using application programming interfaces (APIs) to enable these connections have sprung up globally, but participating financial institutions (FIs) must obtain consumers’ consent to collect and share their information.

Recent data revealed that 128 of 194 countries have regulations to determine which organizations can collect, utilize and share consumers’ data, indicating that data privacy is becoming a key consideration within the broader financial space. Forty-one countries also said they had legislation in place to get users’ consent when initially obtaining this information, showing that more regulators are making sure that consumers understand the nature of the data they are sharing and why.

In the latest Authenticated Payments Report, PYMNTS examines how regulations surrounding consent management are shifting globally and why getting consent management right will determine open banking’s growth in markets worldwide.

Around The Consent Management World

Consent management rules regarding online advertising data collection may be tightening in numerous European Union markets. The Belgian Data Authority recently alleged that online advertising trade organization IAB Europe’s Transparency and Consent Framework (TFC) breaches the EU’s General Data Protection Regulation (GDPR). Statements from the Irish Council for Civil Liberties (ICCL), one of the legal coordinators on the case, also alleged IAB Europe was aware its consent popups violated GDPR. The case highlights why EU entities must pay careful attention to how consent management standards are changing to ensure they remain compliant.

Experts also predict that GDPR regulatory oversight surrounding consent management will increase in 2022, meaning organizations must carefully look at how they structure consent boxes and other forms provided to customers. It is also becoming increasingly important for consumers to understand what data they share and which entities may access their information. This could have implications for how banks and businesses structure the opt-in consent boxes that have long been the online standard.

For more on these stories and other authenticated payments headlines, read the report’s News and Trends section.

Why Secure, Transparent Consent Management Holds the Key to Open Banking’s Growth

The conveniences that come along with open banking require FIs, FinTechs and other third parties to connect and share data easily, but doing so at scale can be tricky as regulators and financial entities continue to debate data privacy standards. This has placed the consent management process — wherein banks gain users’ approval to collect and share personal information — under greater scrutiny, making it key for FIs to ensure that the process is secure and transparent, explained Natalie Talpas, senior vice president and digital product manager at PNC Bank.

To learn more about why banks must develop secure and transparent consent management processes, visit the Report’s Feature Story.

Deep Dive: Exploring Consent Management in the Open Banking Sector

Open banking initiatives are taking shape in markets globally, but their expansion comes with a few growing pains for the FIs wishing to participate. Banks must stay abreast of complicated consent management strategies, but these strategies and regulations surrounding data collection and privacy are still changing. Paying close attention to consent management’s role in open banking’s future growth is thus critical.

To learn more about why consent management is vital for open banking’s continued development and what organizations need to know regarding such management, visit the Report’s Deep Dive.

About the Report

The Authenticated Payments Report, a PYMNTS and LoginID collaboration, is the go-to monthly resource for updates on trends and changes in payments authentication.