The impact of the proposed EU data reforms

The Confederation of British Industry (CBI), a UK business lobbying organisation, has shared its concerns over the proposed changes to the EU data protection regulations; specifically, the potential financial impact on businesses as well as the risk of data compliance restrictions stifling innovation.

The CBI argues that many innovative business models, citing advertising and the music industry as examples, rely on data-sharing to generate revenue and ensure they are providing a tailored user experience and suggests that proposed reforms would restrict businesses’ ability to do this.

In addition to implementing data-sharing restrictions, the CBI highlights the financial consequence of complying with the reforms. The European Commission claims that its proposals will save businesses €2.3 billion a year, across all EU countries, by creating a coherent and streamlined approval process for organisations working across EU states. However, the CBI believes that this is an overestimation of the business benefits and overlooks compliance costs such as changing IT systems, re-training staff, implementing call centres to handle data compliance issues and, in some cases, appointing a Data Protection Officer. While costs are likely to be incurred in order to comply, businesses need to carefully consider the potential cost should they suffer a data breach.

Businesses could potentially face fines of up to two percent of their revenues should they fail to report a breach in the 24 hour time period and the cost to brand reputation should not be overlooked either, as recently demonstrated in the news reports surrounding Global Payments’ data breach.

Those that choose to implement a document management system mitigate the risk of suffering a data breach and incurring huge fines as their documents containing sensitive data are stored in a central, secure system. Other cost burdens that the CBI highlight, such as re-training and IT refresh, would also be significantly reduced, if not eliminated, as the document system is integrated with existing IT infrastructure, improving ease of use.

Click here to find out more about how a document management system could help improve your data protection processes. 

Housing Associations open spending data

Housing Minister, Grant Shapps seems to be making progress with his campaign to push for Housing Associations to make spending data public knowledge – with at least two housing associations, Hertfordshire Housing and Viridian Housing agreeing to open up spending data from next month.

Hertfordshire Housing and Viridian Housing are responsible for around 5,300 and 16,000 properties respectively, with the associations expected to publish the details of all spending which is above £500, and of any salaries which are over £50,000.

The call for greater visibility of spending data follows pressure to expose how public monies are being spent – organisations which receive money from the tax payer should now expect to come under greater scrutiny and be willing to explain financial decisions openly and honestly.

The ability to be able to share this data however will require housing associations to have in place a system which will ensure that all monies spent are being accounted for and accessible – with information being able to be readily accessed.

Although not public bodies, the housing sector in particular takes in money from taxpayers – the majority of which is invested in social housing, with this in mind surely it is only reasonable to share how this investment is being spent? Other public sector areas should beware, with the growing trend of openness and honesty with public spending it is only a matter of time before they too will have to review the systems which they have in place.

Compliance headaches and inefficiencies

Regulatory burdens have always been in evidence. However, the landscape has changed greatly in recent years. The banking crisis, Enron et al and increasingly sophisticated, technically savvy and organised fraudsters are all high profile wake-up calls demanding a support network. That comes in the shape of legislation, regulation from professional and overseeing bodies and peer pressure for better practice.

Anti-Money Laundering, KYC, Suitability, FATCA etc mean that brokers, wealth managers and IFAs are exposed to a range of potentially threatening issues. With massive consequences for failure there’s increasing operational effort and expense needed to keep on top. Working practices evolve but, more often than not, they generate increased operational workload. As the burden compounds then you can be sure that the potential penalties for exceptions will also be rising. It’s no surprise that the numbers of compliance-facing staff therefore continue to rise. Against an economic backdrop where efficiency and cost savings are more important than ever this is a recipe for greater overheads with no appreciable return.

This latest Invu white paper examines a selction of issues faced by businesses in the finance sector, in particular the broking and wealth management communities. It’s not exhaustive but it does pick up some of the significant issues faced on a daily basis and some that are on the way. Many of these issues are burdens which IFAs, insurers, mortgage advisors and even accountants in practice face. Whilst setting these out we also identify the role of technology in mitigating them, most notably, of coure, via document based solutions.

Find out what role document solutions can play in mitigating the risks and reducing the day-to-day compliance impact and download the “Wealth Management – the case for eDM” from our resources section at www.invu.net