In Part 1 of this blog series (see here), we discussed recent data protection developments in China’s e-commerce sector.  In this post, we discuss recently issued rules aimed at improving data governance in China’s financial sector that could also have data protection implications.  These rules can be categorized as falling into two groups: the first group focuses on general data governance requirements applicable to all financial institutions, and the second group regulates specific types of financial services.

These new rules were published by the China Banking and Insurance Regulatory Commission (“CBIRC”) and People’s Bank of China (“PBOC”) during the first quarter of 2021, and include:

  • Guidelines for Data Capacity-Building in the Financial Industry (“Guidelines”) (official Chinese version available here);
  • Financial Data Security – Data Life Cycle Security Standard (“Standard”) (official Chinese version available here); and
  • Draft Credit Reporting Management Measures (“Draft Measures”) (official Chinese version available here).

Both the Guidelines and Standard provide detailed criteria for financial institutions on the proper collection, use and protection of “financial data,” while the Draft Measures introduce data-related requirements for licensed credit reporting agencies.  All of these new rules include data security requirements for both personal and non-personal data.

Continue Reading Privacy Updates from China: Proliferation of Sector-Specific Rules As Key Legislation Remains Pending – Part 2: Data Protection in the Financial Sector

By Bruce Bennett, Carlo Kostka, Craig Pollack, Dan Cooper, Gemma Nash, Kristof Van Quathem, Mark Young, and Sophie Bertin

The EU Payment Services Directive (PSD2), which took effect on January 13, 2018, puts an obligation on banks to give Third Party Providers (TPPs) access to a customer’s payment account data, provided the customer expressly consents to such disclosure.  The new legislation is intended to improve competition and innovation in the EU market for payment services.  The General Data Protection Regulation (GDPR), which is due to take effect from May 25, 2018, enhances individuals’ rights when it comes to protecting their personal data.  The interaction between PSD2, aimed at increasing the seamless sharing of data, and the GDPR, aimed at regulating such sharing, raises complicated compliance concerns.

For example, where banks refrain from providing TPPs access to customer payment data for fear of breaching the privacy rights of their customers under the GDPR, competition authorities may consider this a breach of competition law.  This concern is already becoming a reality for banks – on October 3, 2017, the European Commission carried out dawn raids on banking associations in Poland and the Netherlands following complaints from fintech rivals that the associations were not providing them with what they considered legitimate access to customer payment data.
Continue Reading Overlap Between the GDPR and PSD2

On August 18, 2017, the Central Bank of Kenya (“CBK”) used its authority under Section 33(4) of the Banking Act to publish a Guidance Note on identifying and mitigating cyber risk.  The Guidance Note directs institutions licensed under the Banking Act (Cap. 488) (“Institutions”) to develop and implement a comprehensive set of program requirements to mitigate cybersecurity risk.

According to a 2016 report by Serianu, a Kenya-based IT services and business consulting firm, Kenya lost approximately $175 million to cybercrime in 2016.  The report identifies the introduction of e-services in both the private and public sector as a major factor behind the dramatic increase in new cyber weaknesses.  Other experts say the interconnectivity of the Kenyan economy and the automation of banking services have further exposed Kenya’s financial sector to risk.  In issuing the Guidance Note, the CBK also recognized the “interconnectedness” of financial Institutions and the need for a coordinated approach and information sharing to maintain “public trust and confidence in the financial system.”

As a result, CBK’s Guidance Note establishes minimum requirements that Institutions should adopt in order to develop effective cybersecurity policies and procedures, but recognizes that it is “not a replacement for and does not supersede the legislation, regulations and guidelines that institutions must comply with as part of their regulatory obligations.”  Among other things, the Guidance Note provides regulatory guidance for the following key areas:
Continue Reading Central Bank of Kenya Issues Guidance Note on Cybersecurity

By Denitsa Marinova

On April 11, 2017, the Data Protection Commissioner of Ireland (DPC) published her annual report for 2016, highlighting key developments and activities for the past year and outlining priorities for 2017 and beyond.  The report will be of interest to Irish entities and multinational organizations with a base in Ireland, including companies active in the technology and healthcare sectors.

In 2016, the DPC investigated a record number of complaints (1,479 in total, the majority involving data access requests); received 2,224 notifications of valid data security breaches (a decrease from 2015); carried out over 50 privacy audits and inspections; acted as lead reviewer in seven Binding Corporate Rules (BCR) applications; and held over 100 face-to-face meetings with multinational companies.
Continue Reading Irish Data Protection Commissioner Releases 2016 Annual Report

On October 11, 2016, the finance ministers and central bank governors of the Group of 7 (G-7) countries announced the publication of the Fundamental Elements of Cybersecurity for the Financial Sector, a non-binding guidance document for financial sector entities.  The publication  describes eight fundamental “elements” of effective cybersecurity risk management to guide public and private sector entities in designing cyber security programs based on their specific risk profile and culture.  The goal of the G-7 is to provide a common framework for the financial sector to develop security programs that will “help bolster the overall cybersecurity and resiliency of the international financial system.”

The eight elements describe the core components of a comprehensive cybersecurity program, while leaving the strategic and operational details to each entity.  The publication is not intended to serve as a binding, one-size-fits-all set of requirements; rather, it describes high-level programmatic “building blocks” that each entity can customize to its own security strategy and operating structure.  Each entity should tailor its application of the elements based on an evaluation of its “operational and threat landscape, role in the sector, and legal and regulatory requirements,” and be informed by its specific “approach to risk-management and culture.”

Continue Reading G-7 Publishes Fundamental Elements of Cybersecurity for the Financial Sector