Fintech Finance: Impact of the UK Data Protection Bill

The Data Protection Bill (DPR) is intended to incorporate into English law the data protection rights afforded under the EU General Data Protection Regulation (GDPR), and is being promoted by the UK government as a way of boosting confidence in the UK digital economy. Speaking to Fintech Finance, Lisa Osofsky, EMEA Regional Chair and EMEA Head of Investigations and Dayna Bordin, EMEA Deputy Head of Financial Crime Compliance, explain, however, the security challenges posed to financial institutions by having new obligations in respect of personal data rights and security screening. Balancing data protection with security needs is particularly tough within the context of tackling terrorist financing, they explain, and are set to become even more complex with the rise in frequency and variety of mobile banking. 

The recent shift from large scale terrorist attacks to ‘lone wolf’ or small group attacks has made it difficult for intelligence agencies and financial institutions to identify and prevent attacks, which require only micro finance levels of funding. The challenge will be in incorporating new restrictions on maintaining and sharing customer data under the GDPR (and the DPR) in a way that enables banks to identify early on those customers who may pose a terrorist threat.

While Lisa and Dayna highlight the importance of information sharing and international cooperation to tackle these threats, it won’t be until the Bill has been fully debated in parliament that we will understand how individuals’ rights to privacy and the need to protect its citizens will be married. Until then, financial institutions are able to use advancements in data analytics and AI technology, along with complex screening typologies and transaction monitoring programmes, to limit those individuals who seek to finance terrorist attacks.