HSBC chairman Douglas Flint has called for a public policy debate on the ownership and use of consumer transactional data, as rapid technological change enables banks to assimilate and store vast amounts of personal financial information.
Flint's comments come as the bank reports a ten percent increase in profits for the first half of the year and embarks on a major restructuring that is intended to save $5 billion per annum by 2017.
As part of the overhaul, HSBC has allocated a $1 billion spend in digital technologies over the next two years to reduce frontline and service roles, while reducing its branch square footage by 20% in seven key markets.
In a statement accompanying the release of the results, Flint says: "There is no doubt that banking is in a period of fundamental change as a consequence of technological developments that, firstly, allow storage and analysis of an almost unlimited amount of data and, secondly, allow customers to directly access third party providers when transacting or investing."
He says better use of data will allow more accurate knowledge about the customer to be built, leading to improved customer segmentation and less risk of mis-selling in the future. The same data, together with transaction monitoring, will also enable the bank to enhance its ability to identify bad actors within the system and reduce the cost of financial crime.
However, the sheer scale of data to be collected and stored demands clarity over responsibility for data security and transparency over who has access to that data and for what purpose, argues Flint.
"Customers need to understand the value of their data so that they can assess the bargain that is being offered by nontraditional providers in return for their financial footprint," he says. "Customers also need to know in a disaggregated service model to whom they should complain if a transaction goes awry."
There are also bigger concerns over financial stability, as the world's banks build ever larger digital databases of financial credentials and transaction data which will need "best-in-class protection from cyber crime. This will require even greater co-operation between the industry and public sector law enforcement and intelligence services than exists today."