Privacy in Financial Information Networks: Directions for the Development of Legal Privacy-Enhancing Financial Technologies

n light of the strategic role of financial information for law enforcement, the protection of privacy regarding financial data must be balanced with the advantages of automated mechanisms for the monitoring and recording of financial activities. The growing availability of financial data and the global dimension of financial networks, however, impose to carefully examine practices concerning the management of financial data, checking them against the core rules and principles of data protection. This paper steers this effort providing a framework for understanding privacy in the financial context; moreover, it overviews the relevant legal frameworks affecting the management of financial information and assesses concrete industry practices to expose some compelling privacy issues. The study suggests that further research is needed to establish (1) whether current practices in the financial industry determine a lack of legal protection with regard to users’ privacy; (2) whether it is desirable to develop technological solutions that allow a greater degree of anonymity for digital financial transactions; and, if so, (3) which is the most suitable governance/legal and institutional framework for anonymous digital transactions.