The Joint Committee of the European Supervisory Authorities on Monday launched a public consultation about the potential benefits and risks of big data for consumers and financial firms to determine whether any further regulatory or supervisory actions may be needed.

“Big data can generate ideas, solutions or predict certain events or behaviours and is already used in the financial industry,” the Joint Committee says in a statement.

“The purpose of the consultation is for the ESAs to understand better what the big data phenomenon means for consumers, the financial industry and regulators,” the Joint Committee adds.

Existing legislation on data protection, competition and consumer protection, are all relevant to financial firms in this area, but do not explicitly address their use of big data, notes the discussion paper released in conjunction with the consultation. Regulators are now contemplating whether the existing legislative and regulatory framework is sufficiently flexible to cover big data, or whether there are gaps that need to be filled.

“The use of big data is likely to transform the way products and services are provided with benefits for consumers (in terms of products/services better tailored to consumers’ needs, better quality or cost-effective services/products) and financial institutions (for instance in terms of more efficient processes and decision-making or better management of risks or fraud situations),” the discussion paper says.

“At the same time, the use of big data could potentially also have an impact on consumers’ access to products/services, raise issues around the processing of data and financial institutions’ pricing practices or decision-making using big data technologies, the potential limitations or errors in the data and analytic tools, or security and privacy/ethical concerns, eventually leading to legal and reputational risks for financial institutions,” the paper adds.

“Potential entry barriers in accessing big data technologies could also have negative implications on innovation and competition in the financial markets at the detriment of consumers’ welfare,” the discussion paper says.

The consultation closes on March 17, 2017.