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01 Apr 2004

EU Data Protection in the Context of Financial Services

Alfredo Sousa de Jesus

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ECRI Research Report No. 6, 40 pages

Individual privacy has always been a source of concern for common citizens, but mainly from the perspective of human rights and civil liberties.

Nowadays, the internet has focused attention once again on the issue of data protection. The major barrier to full development of the internet and e-commerce precisely remains consumers’ reluctance to provide private and confidential information. With globalisation of the economy and the IT revolution, the banking industry is going through an evolutionary process, readapting the relationship with clients through new products and new means of delivery. In order to reap all the benefits from these new potentialities, however, financial services should not undermine the privacy issue.

National legislation on data protection is often out-of-date, ineffective and unenforceable owing to jurisdictional limitations, whereas at international level, a multiplicity of initiatives has led to a situation that is plagued by inconsistencies. Nevertheless, international instruments serve as an example for other national and EU legislation. As an alternative to the legislative approach, selfregulation, i.e. a code of conduct, appears particularly well suited to the issue of data protection in the context of the internet.