All FCA-regulated firms have been put on notice by the new FCA chairman, Charles Randell, that they need to make it clearer to consumers what personal data they are collecting about them and how it will be used. Randell added that the use of Big Data by FCA-regulated firms demands a new way of thinking about consumer rights and regulation and that, if firms could not maintain transparency themselves, then the regulator may have to step in. In his speech in London, Randell said that FCA-regulated firms must provide "short and readable statements" explaining to consumers how their data will be stored.
Technological innovation could end up oppressing society rather than improving it if appropriate safeguards are not put in place, Randell warned, adding that consumers could be abused by the computer algorithms that govern financial products. Big Data, artificial intelligence and behavioural science have the potential to bring huge benefits to consumers. However, the industry needs to make sure that technological innovations do not exclude some customers and that it helps keep people free to make well-informed decisions in order to be sustainable and positive.
Regulation would be central, Randell said, because it would help to define whether AI and Big Data would liberate the customers of the future or disenfranchise them. He outlined that the key to positive innovation is a firm's culture and purpose; a genuine understanding of technology and its outcomes; and trust and communication with its customers. We can no doubt expect to hear much more on these topics over the foreseeable future.
Tahyean Ahmed also contributed to this article.
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