BASEL, Switzerland—The Financial Stability Board (FSB) has published its assessment of international data standards relevant to cross-border payments,the FSB announced.
The assessment looks at national and regional data frameworks relevant to the functioning, regulation and supervision of cross-border payment arrangements, the FSB said.
“The stock take was conducted to identify issues relating to cross-border use of data by national authorities and by the private sector in cross-border payment arrangements. The report identifies a number of frictions from data frameworks that pose significant challenges to improving the cost, speed, transparency and access of cross-border payments,” the FSB said.
List of Issues
These include:
- Uncertainty among payment providers on how to balance the various obligations under different data frameworks, such as obligations related to data privacy and to anti-money laundering and combating the financing of terrorism (AML/CFT)
- Challenges arising from restrictions on the flow of data across borders, which could make it more difficult to identify fraud, comply with AML/CFT and other regulatory obligations, as well as manage risk on an enterprise-wide basis.
‘Degree of Friction’
“A certain degree of friction from data frameworks may be an unavoidable and acceptable consequence of regulations aimed at preserving the security of transactions, meeting AML/CFT objectives and protecting the privacy of citizens, the FSB said.
It added, however, the extent of fragmentation in data frameworks across jurisdictions was considered a main contributor to increased cost and inability to automate payments.
According to the FSB, work is already underway in the FSB to follow-up and address these issues.
In particular, the FSB said it is developing recommendations to promote alignment and interoperability across data frameworks applicable to cross-border payments.
Input Invited
“To inform its work, the FSB will engage with industry, data privacy experts, financial regulators and data protection agencies to develop case studies to assess the impact of selected frictions on cross-border payments and identify where action should be prioritized,” the FSB said.
The FSB is inviting stakeholders to submit case studies on these issues by Oct. 20 to fsb@fsb.org under the subject heading “Data frameworks.”
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