This Discussion Paper identifies the risks and potential benefits of innovative uses of data to consumers, financial institutions, and financial integrity more widely. For the purposes of this assessment, the use of consumer data encompass the collection, processing and storage of data, including aggregation tools and other data processing technologies. Potential benefits identified by the EBA include cost reductions, improved product quality, and new sources of revenue for financial institutions, whereas the risks identified consisted of information asymmetries, the misuse of data, data security, as well as reputational risks for financial institutions.
Payment data, among other types of consumer data, is of particular interest to the EBA because consumers engage in payment transactions often, and do so each time they pay for the purchase of products and services through their payment accounts or payment cards. Unlike other, one-off types of data provided by consumers, payments data therefore provides financial institutions with a continuous insight into consumers’ purchasing habits and preferences.
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