Target Confirms Unauthorized Access to Data on 40 Million Accounts

by Michael Misasi 0

The Parliamentary Commission on Banking Standards published its findings this week and key takeaway includes a comprehensive set of proposed reforms to improve public confidence in the domestic banking system following a series of scandals. Download the report from the Payments Journal Library.

The major issues and proposed reforms that affect the British payments industry include:

• Further payment regulation. Under the current system large, established financial institutions control access to the payments system which prevents competition and needs to be addressed in the near future. The Commission recommends that the large banks relinquish ownership of the payments system.

• Peer-to-peer and crowd funding platforms should be expanded. The Commission believes that the platforms have the potential to improve the UK retail banking market as a source of competition for mainstream banks and the available alternatives. The Commission recommends that authorities look into providing tax arrangements and incentives that would boost growth between the platforms and create a level playing field.
• Establish a panel on account portability. The panel would examine the privacy implications of the central storage of consumer data. It should also examine reducing the time it will take to switch between banks.

Other issues outlined in the report include the need for large financial institutions to create a chief risk officer who will have broad authority and with the goal to prevent more scandals; end gender bias seen on trading floors; and seek full criminal charges for financial personnel that participate in illegal activities.

Though public perception of the large financial institutions remains largely negative, if they proceed to enact some if not all of the recommendations outlined by the Commission, over time, the banks may be able to win back some consumer support. This report is just the first step in the right direction and now it’s the banks’ turn to respond.