The HKMA encourages authorised institutions to adopt the PCPD’s Ethical Accountability Framework in the development of fintech products and services.
The HKMA (Hong Kong Monetary Authority) has issued a new circular to authorised institutions encouraging the adoption of the Ethical Accountability Framework for the collection and use of personal data.
“As fintech development in the banking sector gathers pace, [authorised institutions] will be collecting and using an increasing amount of personal data of customers so as to provide them with tailored financial services,” the HKMA said.
“In view of this development, the HKMA, in collaboration with the Hong Kong Association of Banks (HKAB), has been engaging with the PCPD to provide more guidance to [authorised institutions] on the proper use of personal data in the online environment.”
The HKMA is encouraging the adoption of the Ethical Accountability Framework, issued by the Office of the PCPD (Privacy Commissioner for Personal Data) in October 2018. The research to develop the Framework saw participation from some twenty organisations in Hong Kong from various sectors – including banking, insurance, telecommunications, healthcare services and transportation.
The project was aimed at achieving ethical and fair processing of personal data and in advanced processing activities such as artificial intelligence and machine learning, by fostering a culture of ethical data governance and addressing the personal data privacy risks brought about by technology.
Last month, the HKMA and HKAB jointly organised a seminar at which Stephen Kai-yi Wong, the Privacy Commissioner for Personal Data, outlined the Framework and shared industry good practices, including the adoption of “privacy by design” and “privacy by default” when developing fintech initiatives.
The concept of data ethics and stewardship was introduced, which the HKMA says it supports in the context of collecting and using personal data. Under the Framework, three data stewardship values are recommended for Hong Kong organisations when carrying out advanced data processing activities: respectful, beneficial and fair.
Also explained at the seminar were Data Stewardship Accountability, the Data Impact Assessments and the Oversight Models which support the Framework.
Data Stewardship Accountability calls for organisations to define and translate stewardship values into organisational policies and processes for ethical data processing, using an ‘ethics by design’ approach so that society, groups of individuals, and individuals themselves gain value from data processing activities.
Ethical Data Impact Assessments, similar to GDPR requirements, are used when advanced data analytics may be impactful on people or when data enabled decisions are being made solely by machines. The Framework proposes a model that can be adopted to assess the impact to all stakeholders’ interests on the data collection, use and disclosure in data-driven activities.
The Process Oversight Model looks at how an organisation translates organisational ethical values into principles and policies and into an ‘ethics by design’ programme. It also considers how the internal review processes, such as conducting data impact assessments and establishing effective individual accountability systems, are implemented.
“The Models can assist AIs in addressing privacy concerns of customers and enhance their trust in using fintech services,” the HKMA said, encouraging authorised institutions to adopt the Framework and implement the Models in the development of fintech products and services.
The Ethical Accountability Framework is available here.