Brazilian banks will share data to combat fraud

The website Canaltech published a report that shows that Brazilian banks will begin sharing customer, account and transaction data, with the aim of combating fraud. Dr. Matheus Puppe, partner in the TMT, Privacy & Data Protection area at Maneira Advogados, was interviewed to talk about the subject.

Brazilian banks will share data to combat fraud

By Felipe Demartini | Edited by Wallace Moté

(Photo: Marcello Casal jr/Agência Brasil)

Banks and financial institutions in Brazil will start sharing data on customers, accounts and operations carried out with the aim of combating fraud. The rule approved this week by the Central Bank (BC) comes into force at the end of the year and seeks to facilitate access to information as a way of blocking suspicious movements and facilitating prevention measures.

The new regulation applies to all financial institutions authorized to operate in our country by the BC and includes the identification of individuals who attempt to carry out fraud, also including recipients if the suspicion is related to transfers. Banks must also share details about the occurrences and which organizations are responsible for the accounts that would receive funds.

Meanwhile, financial institutions are responsible for obtaining consent from their customers for the processing and sharing of information, as well as for the secure transmission of this data. Central Bank regulations provide for banking secrecy and also respect the General Data Protection Law, which has been in force in Brazil since 2020.

“The LGPD served as an important basis for regulation, establishing guidelines for the processing of personal information”, points out Matheus Puppe, partner in the TMT, Privacy & Data Protection area at Maneira Advogados. “Data sharing must be carried out responsibly and in accordance with the principles of the law, guaranteeing the privacy and security of those involved.

CUSTOMERS CAN DENY USING DATA AND PREVENT SHARING

The Central Bank's idea is that data on fraud and suspicions be included in the National Financial System (SFN) and the Brazilian Payment System (SPB), sets of entities that make up the country's economy. This would make it easier to consult and obtain information about accounts created by oranges, the use of false identities and the application of scams or fraud involving payments, with something similar also being developed at Pix.

This intention, however, ends up coming up against the legislation itself that regulates data sharing, more specifically, the need for authorization for this exchange. Customer consent is mandatory for the initiative to work, but it can also be denied or revoked by them at any time and for any reason they wish.

“The standard is well-intentioned with the aim of curbing fraud, especially when the fraudster moves between institutions, but fails in some technical aspects”, points out Márcio Chaves, partner in the Digital Law area at Almeida Advogados. In his view, a denial by an alleged scammer would be enough for data about their transactions not to be shared, making measures to combat crime more difficult.

Even so, for Puppe, the measure represents a significant advance in the fight against crimes such as money laundering and bank fraud. “It seeks to reduce the asymmetry of relevant information and restrictions on access to necessary data, strengthening prevention capacity and allowing greater effectiveness in the repression of these crimes.”

The rules approved this week by the Central Bank and the National Monetary Council (CMN) come into effect on November 1st. The deadline is necessary to adapt the systems and other tasks necessary for the start of operations of the data sharing platform.

Source: Central Bank of Brazil

https://canaltech.com.br/seguranca/bancos-brasileiros-vao-compartilhar-dados-para-combater-fraudes-250602/