U.S. and European consumer protection agency officials have begun talks on the impact of digitalization of the financial services sector in areas such as pricing, customer service, competition and privacy.
Rohit Chopra, the U.S. Consumer Financial Protection Bureau (CFPB) director, and Didier Reynders, the European Union’s Justice and Consumer Protection commissioner, said in a joint July 17 statement that their focus will primarily be on digital developments in the sector with the aim to improve policy and regulatory cooperation.
The move comes as financial institutions have expanded the use of automated decision-making products and services such as Buy Now, Pay Later that are shifting the way consumers borrow and spend money, Chopra and Reynders said. If left unchecked, consumers could increasingly be exposed to fraud and manipulation among other concerns, they added.
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The issues they plan to address include the use of artificial intelligence (AI) in financial services and the related opportunities and risks for consumers such as the lack of transparency, misuse of data and violation of financial privacy rights, discrimination and exclusion.
They plan to meet at least once a year for informal discussions on the matter with senior staff and subject matter experts and include roundtable discussions with consumer groups, industry representatives and others.
Earlier this month, a CFPB study raised concerns over how poorly implemented AI chatbots in banking can lead to consumer harm. The agency has also looked at hidden risks in mobile payments apps like Venmo, PayPal and Cash App.
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