Data Protection and the Insurance, Banking and Credit Reporting Industries
In Chap. 1 the data protection framework at the EU level was analysed in order “to prepare the field” for the analysis which will be carried out in this chapter. Here the focus will be the processing of personal data that takes place in the financial, in
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Data Protection and the Insurance, Banking and Credit Reporting Industries
In Chap. 1 the data protection framework at the EU level was analysed in order “to prepare the field” for the analysis which will be carried out in this chapter. Here the focus will be the processing of personal data that take place in the financial, insurance and credit reporting industries. The insurance industry and the banking sector use personal data to develop their activities with more efficiency, and the credit information suppliers are an important part of this mechanism, since they help banks and insurance companies in their search for personal data about their potential customers.1 Banks and insurance companies2 use personal information3 for risk analysis,4 such as the risk of making a loss for example, in the case of 1
The expression ‘credit information suppliers’ is used because there are basically two kinds of institutions that provide credit information: credit bureaus and public credit registers. Jentzsch, Nicola. Financial Privacy: An International Comparison of Credit Reporting Systems. 2.ed. Berlin: Springer, 2007. P. 61. For a definition of credit bureaus and public credit registers see International Finance Corporation (IFC)—World Bank Group. Op. cit. P. 7. “A credit bureau is an institution that collects information from creditors and available public sources on a borrower’s credit history. The bureau compiles information on individuals and/or small firms, such as information on credit repayment records, court judgments, and bankruptcies, and then creates a comprehensive credit report that is sold to creditors. ( : : : ) A public credit registry is defined as a database managed by the public sector, usually by the central bank or the bank supervisor, that collects information on the creditworthiness of borrowers (persons or businesses) from supervised financial institutions, makes such information available to financial institutions, and is used primarily for supervisory purposes.” 2 International Finance Corporation (IFC)—World Bank Group. Op. cit. P. 7. “Consumer credit bureaus collect information in a standardized format from several types of lenders, such as banks, credit card companies, retail lenders, other non-bank financial institutions, and utility companies.” 3 DeCew, Judith Wagner. Pursuit of Privacy—Law, Ethics, and the Rise of Technology. Op. Cit. P. 147. “At little or no cost, the bureaus make it easy for almost anyone to find out another individual’s income, employment status, marital status, driving record, real state holdings, credit limit, and even civil and criminal court records.” 4 International Finance Corporation (IFC)—World Bank Group. Op. cit. P. 5. “Credit bureaus help address the fundamental problem in financial markets known as ‘asymmetric information’, which means that the borrower knows the odds of repaying his or her debts much better than the M. Viola de Azevedo Cunha, Market Integration Through Data Protection, Law, Governance and Technology Series 9, DOI 10.1007/978-94-007-6085-1 2, ©
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