The U.S. Securities and Financial Markets Association (SIFMA) on Thursday introduced a set of principles to help protect clients when they provide access to their data.
SIFMA’s “data aggregation principles” aim to address the security risk that can arise when investors use third-party platforms as a way to assess their financial situation.
The industry trade group says that although these sorts of services can be valuable to clients in terms of enabling them to make more informed financial decisions, they may also place client data at risk.
The principles provide guidance for SIFMA’s members (which include broker-dealers, banks, and asset managers) when they are working with data aggregation applications. They cover four basic areas: access; security and responsibility; transparency and permission; and scope of use.
The new guidance represents the outcome of an industry initiative to better protect consumers’ financial data.
“SIFMA is co-ordinating a broad-based industry effort to protect a customer’s financial information, with a focus on investors’ right to securely access their own data. We have created a set of industry-wide principles for protecting, sharing and aggregating customer financial information,” SIFMA says in the principles document.
SIFMA also introduced resources for brokerage firms to help discuss the issue with clients, and to better protect their data.
“Data has never been more important, more available or more at risk. Keeping our customers’ data safe is of paramount importance to our industry,” says Kenneth Bentsen, Jr., president and CEO of SIFMA, in a statement. “The goal of the principles is to provide customers with safe and secure access to their data and protection of their confidential account information, along with assurances that data aggregators adhere to the same data and security standards followed by regulated financial institutions.”