United States and Singapore to enhance data mobility in financial services
THE NETWORK of connectivity today is ever increasing. Across all industries, a barrage of data, deemed as the new currency, is available, and the financial sector is no exception.
Recently, Brent McIntosh, the US Treasury Under Secretary for International Affairs met up with Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore to discuss the cruciality of data connectivity in financial services. A joint statement was issued after, which underscored the following:
# 1 | Data mobility is critical
Data mobility benefits all and is vital for the development of a truly global economy.
It then follows that the aggregation, storage, processing, and transmission of data across borders is crucial for the growth of a healthy financial sector development.
Free-flowing digital data in financial services, augmented by the utilization of technology, allows for a wide range of benefits and opportunities such as greater consumer choice, enhanced risk management, and increased efficiency.
This, however, brings about unprecedented risks and challenges, especially from the perspective of policymakers and regulators.
To ensure that data is being used for the better, there needs to be in place a proper framework and safeguards as to how these data are used and transmitted across borders.
# 2 | Data localization is opposed
Data localization is the act of confining data within the borders of the country where data is generated.
Both countries oppose data localization, and are firm in their stance on data mobility, in as long as financial regulators have access to data needed for regulatory and supervisory purposes.
Localization requirements often backfire as it introduces more harm than good. For example, it increases cybersecurity and other operational risks, hinders risk management and compliance, and impeded regulatory and supervisory access to information.
# 3 | Collaboration between countries must be fostered
Both countries will be joining hands in rolling out policies and regulations that would encourage and empower financiers in cross-border data mobility.
This only holds if data (including personal information) to be transferred across borders are solely used for business purposes.
The location where data is stored and processed also ought not to be confined to a particular country or region, provided that regulators have full access to the information required to keep financial service suppliers accountable and in check.
Further, both countries expressed their commitment to collaborate, and share intelligence on the development of issues related to the above.
Other countries were also urged to jump onboard to increase efficiency, and also enhance the cohesiveness of the global financial sector.
With this, two powerhouses have set the stage for a truly borderless economy. Countries cannot afford to be selfish with their data any longer.
Maximum benefit will be brought to the people when countries pool their resources together, and tackle issues like cross-border money laundering, defending against cyberattacks and managing global risks hand in hand.