Offshore personal data: Trust us, say banks

James Riley
Tuesday, 27 October 2009 12:59

IT Industry - Strategy

The Australian Bankers Association has rejected calls for bank customers to be given an explicit choice about whether personal  information is processed offshore or in Australia, and said its members were already required get consent from customers about the handling of data when they signed up for services.

Requiring more explicit permission on where data can be processed by banks and other financial institutions was impractical, and would inevitably lead to higher costs, ABA chief executive David Bell said.

South Australian Senator Nick Xenophon called for greater transparency from banks about where personal information was sent for processing, joining with the Finance Sector Union in calling for customers to be given a choice to have that data retained on-shore.

"Confidentiality of customer information is at the core of a successful banking operation," Bell said.

"The ABA is confident that banks take appropriate measures to protect customer information, regardless of whether or not some processing functions are undertaken offshore or whether they are all done in Australia."

He said customers already provide consent on how their personal data can be disclosed by a bank, which was a requirement under existing law.

The FSU said yesterday more than 5,500 jobs in the finance sector had been moved to lower-cost offshore locations – a number the ABA dispute.

Bell maintains the numbers of jobs in the sector had increased in 2008 – as measured by the Australian Bureau of Statistics – by 1.6 per cent to 146,700 last year, despite the effects to the global economic downturn.

"It is up to individual banks as to how they manage their systems and data, but it is important to recognise that banks not only have a legal obligation to secure personal information that they collect from their customers but that they also have a very strong commercial incentive to ensure customer information is properly protected." Bell said.

The union and Senators demand that customers provide written permission before information is sent overseas is impractical and unnecessary, he said.