U.S.-Singapore Free Flow of Data Announcement Represents an Important Step Forward
By Candi Wolff, Executive Vice President, Global Government Affairs, Citi February 07, 2020 04:00 PM
As the bank with one of the largest global data infrastructures, which we use to facilitate about $4 trillion of financial flows daily, ensuring that data moves across borders freely and securely has long been a top priority for us at Citi. Recently, The World Economic Forum published a report reinforcing the increasing importance of the free flow of data to our national, regional and global economies. The report also highlighted some specific actions that governments are taking to restrict and constrict those essential flows.
That's why at Citi we welcome the more holistic approach to evaluating rules and regulations concerning the free flow of data in financial services announced this week in Singapore by the U.S. and Singapore governments.
In a joint statement from the U.S. Treasury Department and the Monetary Authority of Singapore, amplified by remarks delivered by U.S. Treasury Under Secretary for International Affairs Brent McIntosh, both governments made clear their official view that allowing financial institutions to aggregate, store, and transmit data across borders has many benefits, from accelerating economic development to fostering innovation to bolstering financial stability.
Recent trade negotiations, including the United States-Mexico-Canada Agreement and the U.S.-Japan Trade agreements, have demonstrated the high priority that the U.S. government places on securing provisions within trade deals that protect the free flow of data for all sectors, including financial services. This week's announcement by Undersecretary McIntosh, however, extended the scope of that priority beyond trade agreements. He officially committed the U.S. to establishing a technical experts group on cross-border financial services data issues as part of the U.S. platform for its G7 presidency in 2020.
The experts group's goal will be to foster a sharper understanding of the key public policy objectives and the importance of creating stronger communication channels with relevant counterparties. "From trade agreements to financial regulatory cooperation," McIntosh explained, "we are focused on how we can work on a bilateral and multilateral basis to harness the benefits of cross-border data flows."
Citi welcomes this heightened emphasis on the part of the U.S. government on a critical aspect of our business model. As we serve customers and clients around the globe, we rely on regional and global data centers to administer fast and trustworthy transactions, ensuring the seamless and secure flow of data across national borders. The ability to move data among and between different data centers enables Citi and other financial services companies to better detect fraud, manage cross-border risk and capture operational efficiencies to lower costs to serve customers and clients.
We fully appreciate and support the need for financial regulators to have timely access to data stored by financial institutions, but policies that require data to be stored locally often produce results that run counter to those objectives. In fact, we have repeatedly found that our institution's ability to transfer data across borders helps us do an even better job of complying with ever-evolving and often complex financial regulatory requirements in different markets and jurisdictions.
From our perspective, this announcement marks a significant step forward in ensuring the free flow of data. At Citi, we look forward to continuing to engage with governments around the world on key policy initiatives and shared objectives.