Douglas W. Arner, Giuliano G. Castellano, Ēriks K. Selga
Volume 74, Issue 2, 235-292
Finance is one of the most digitalized, globalized, and regulated sectors of the global economy. Traditionally technology intensive, the financial industry has been at the forefront of digital transformation, starting with the dematerialization of financial assets in the 1960s and culminating in the post–2008 global financial crisis era with the fintech movement. Now, finance is data: financial transactions are transfers of data; financial infrastructures, such as stock exchanges and payment systems, are data networks; financial institutions are data processors, gathering, analyzing, and trading the data generated by their customers. Financial regulation has adapted to this fast-paced evolution both by implementing new regimes and by adapting existing ones. Concomitantly, general data governance frameworks to protect a broad spectrum of interests, from individual privacy to national security, have emerged. Though these areas of law intersect, their relationship often remains unclear. This Article sheds new light in this critical area, focusing on key challenges and providing viable solutions to address them.
First, we define financial data governance as a heterogenous system of rules and principles concerned with financial data, digital finance, and related digital infrastructure. To explain how legal and regulatory regimes interact with the digitalization of finance, we consider the key emerging financial data governance styles in the European Union, People’s Republic of China, India, and the United States. Second, we examine the challenges affecting financial data governance. While finance is inextricably linked to data governance, the coalescence of financial regulation, new regulatory frameworks for digital finance, and general data governance regimes is not always harmonious. Conflicts arising from the intersection of different uncoordinated regimes threaten to frustrate core policy objectives of stability, integrity, and security, as well as the functioning of the global financial system. Addressing this requires a reconceptualization of the financial data centralization paradigm, both by regulators and by the financial industry.