The UK’s recent shift in data legislation, now known as the Data (Use & Access) Bill, marks a significant evolution from its earlier iterations. One of the standout features is its push for organizations to share data, particularly to fight financial crime. This new focus on “recognized legitimate interest” shifts the conversation from simply having a “legitimate interest.” It opens the door for automatic data sharing in real time, a crucial adjustment in our fast-paced financial world where speed matters.
The bill also paves the way for a smart data economy, building on the successes seen with open banking. The UK has led the way in this area, and recent events like April’s Global FinTech Week underline the country’s dominant position in fintech, contributing significantly to government growth initiatives. This Data Bill aims to take the UK “beyond fintech to ubiquitech,” creating pathways for other industries like medtech and insurtech to emerge, driven by the digital economy’s underpinning technologies.
Referring to the Data Bill as “the one bill to rule them all,” it underlines the reliance of other recent legislative acts on its provisions. For instance, the Economic Crime & Corporate Transparency Act leans heavily on the “recognized legitimate interest” framework, while reforms at Companies House hinge on verifying directors. However, this also raises serious concerns about potential vulnerabilities, exposing the system to both future and existing fraudulent activities.
Take identity security, for example. There’s a long-standing discussion about whether the standards set by utility companies like British Gas truly measure up. The current trust framework lacks a liability model, making it difficult to feel secure. Instead of bolstering protections, references to outdated guidelines contribute to vulnerabilities that criminals can exploit.
On the cybersecurity front, ignoring existing vulnerabilities could severely undermine public trust, especially given past incidents like the NHS National Programme for IT’s failure back in 2012 due to data security concerns. Health Secretary Wes Streeting rightly points out the need to optimize NHS data while maintaining public trust—a challenging feat if lower security standards come into play for sensitive health information.
Fraud remains the largest crime in the UK, accounting for 41% of all crime, with tech vulnerabilities still a pressing concern. The juxtaposition of new European regulations like NIS2 alongside weakened security measures could spell trouble for the UK’s “trust framework.” At the same time, the upcoming Cyber Security & Business Resilience Bill aims to address critical vulnerabilities in national infrastructure, highlighted by recent high-profile incidents like the Heathrow Airport shutdown.
Despite the intentions behind the Data Bill, the patchwork of existing security measures leaves much to be desired. There’s potential for a transformative moment in establishing real identity security, but that will require cohesive and robust implementation. Until then, the lowest common denominator will likely prevail, allowing even the most basic fraudulent tactics to persist.
Moreover, while the introduction of international biometric chip passports offers some hope, it’s essential to remember that organized crime often operates at state-sponsored levels. The Economic Crime and Corporate Transparency Act promises solutions but risks creating loopholes that make it easier for criminals to exploit the system.
In short, the Data (Use & Access) Bill contains opportunities to revolutionize the fight against financial crime and enhance cybersecurity. Yet, if trust in the verification of individuals and organizations falters due to vulnerabilities in its processes, we could find ourselves facing a repeat of past failures like the Gov.uk Verify debacle.