Industry body the Chartered Insurance Institute has warned that the data reforms recently proposed by UK regulators may not be capable of preventing future consumer detriment.
The reforms put forward by the Financial Conduct Authority (FCA) and the Bank of England aim to facilitate a more data-driven approach to regulation.
Utilising tools such as analytics and automation, the regulators believe they can support financial stability and competition while better protecting consumer.
But Keith Richards, Managing Director of Engagement for the Chartered Insurance Institute, has released a statement arguing that the reforms are too narrow in scope.
“It is vital that the regulator has the right data to inform rules but data alone isn’t enough to prevent future consumer detriment,” Richards said.
“It is vital data is accompanied by human insight to ensure developments in the market are thoroughly understood. Digital breadcrumbs can’t replace the knowledge gained by speaking to those who assist consumers. “
Richards also noted that a desire to streamline data collection could mean that different assets are treated the same, simply to create large ‘buckets’ for counting in a standardised way across the sector.
“This, in turn, might lead to an over-simplified view of the market,” he warned, adding: “I am pleased the regulator will work with firms to ensure data collection is less burdensome. The regulator needs to ensure the market understands how this information will be used.”
