European Banks are caught in Data dilemma

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European banks are agonizing over how to handle the mountains of client data at their disposal -- and not just because Facebook Inc.’s privacy scandal showed them the potential pitfalls of getting it wrong.

Sweeping new European Union rules kicked in on Friday, setting out strict new boundaries on the information companies can gather about their clients and how they use it. Violators can be fined as much as 4 percent of their global revenues.

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Part of the challenge is that while GDPR does hold fintech firms that misuse or fail to protect customer data provided by the banks financially liable, it’s the lender -- who is powerless to police the data once it’s handed over -- who would likely bear the brunt of bad press in the public’s eyes, Lokke Moerel, a data-protection lawyer at Morrison & Foerster LLP, said in an interview.