On December 19, 2016 the Joint Committee of the European Supervisory Authorities (“ESAs”) launched a public consultation (the “Consultation”) on the potential benefits and risks of Big Data for consumers and financial firms to determine whether any regulatory or supervisory actions will be required. The ESAs are three EU-wide supervisory authorities, the European Banking Authority (“EBA”), European Securities and Markets Authority (“ESMA”) and the European Insurance and Occupational Pensions Authority (“EIOPA”).
Gabriel Bernardino, Chairman of EIOPA and the current Chair of the Joint Committee of the ESAs, said: “Internet and mobile devices have become a core part of our lifestyle and the ways in which data is generated, collected, stored, processed and used have evolved at unprecedented rates.”
The Consultation is split into three parts. The first part sets out the scope of the consultation and describes the Big Data phenomenon as observed by the ESAs. Stakeholders are requested to address whether they agree with the ESAs’ description of Big Data and what financial products/activities and consumer organisations are most likely to be affected by Big Data. The Consultation also urges Stakeholders to identify the non-regulatory barriers to the development of Big Data which exist, particularly in the financial sector.
The Consultation next presents a preliminary assessment of the potential benefits and risks for consumers and financial institutions. Stakeholders are again asked to consider whether the benefits described are accurate, whether the regulatory framework adequately addresses any risks and whether Big Data will have implications on the availability, affordability and market behaviour of consumers in the financial sector.
The final section of the Consultation discusses the possible evolution of the market with the adoption of Big Data technologies. The Consultation asks what the key success factors for Big Data strategy are and what the greatest future challenges will be in the development and implementation of Big Data strategies.
The Consultation could serve as the first step to a new regulatory framework which addresses the establishment of Big Data in the new Digital Single Market. Following the Opinion released by the European Data Protection Supervisor in September on the enforcement of fundamental rights in the age of Big Data, there has been a visible shift in focus towards the future effects of Big Data in the market.
Comments on the Consultation can be submitted using the ‘send your comments’ button on the ESMA website and must be submitted by 17 March 2017.