The Banking Executive, Issue 155, November 2021

Who Will Govern Global Data? digital platforms at an unprece- dented rate. Data governance vary significantly across countries and, even in countries where data-re- lated laws exist, enforcement mechanisms might not be in place. Such divergence in regulation ulti- mately leads to a divergence in standards and experiences in the Internet of Things (IoT). For in- stance, while some nations are treating privacy as a human right and making great efforts to pre- serve users’ information and anonymity, other governments are enforcing strong state control and content censorship. Many nations demand data to be stored locally and impose limitations to data transfers outside their borders. Governments want as much con- trol over data for security and pro- tectionism reasons. Nevertheless, fragmented approaches to gover- nance do more harm than good. Nations could and should take part in international agreements to con- verge data-related policies, but still preserve the nations’ policy sphere and sovereignty to data gover- nance. By creating a governance framework which facilitates free data flows, while ensuring cyber- security and trust, all nations would benefit and still decide how to regulate data. • Lack of data Interoperability at a Global Level: There is no universally accepted definition of interoperability of data. With interoperability, transac- tion costs are reduced and data is more secure since agents would no longer need to invest in a new sys- tem just to “read” the new informa- tion. Agents would also no longer need the services of a third party who will convert the information into a format that is readable by their systems. This promotes effi- ciency through cost-savings and improves security through ex- changing information directly. • Constraint on data flows: Data localization, which implies that data collected from a country should be stored within the borders of that country, is a major chal- lenge. Under extreme localization, data should be stored within the borders of a country and under no circumstances it will be allowed to be transferred elsewhere. On the other end of the spectrum, no lo- calization, is no regulation as to where collected data should be stored. Countries occupy signifi- cantly different points on the spec- trum. India has advocated for relatively strong localization of personal data, whereas the United States US, Mexico, and Canada have recently adopted a provision that entirely rejects localization. A consensus on data protection that does not bound or limit a country’s localization policy is needed. ADDRESSING THE GLOBAL DATA CHALLENGE In this section we overview the vari- ous approaches to address the chal- lenges facing global data and global data infrastructure. These include building new data value chains, leveraging Artificial Intelligence AI technologies, adopting innovative approaches to governing data flow, and building Europe global data in- frastructure. New data value chains The G20 Policy Brief No. 155 of Sep- tember 2019, puts standards for the digital economy and for developing an architecture for data collection, access and analytics. G20 leaders view digitization as a way to en- hance the competitiveness of the economy and improve the delivery of services. In order to achieve this vision, new data value chains are needed. The G20 policy brief confirms a growing demand for the creation of data value chains. It then proposes a common approach to facilitate the standardization of data collection, data access and data analytics, which could be implemented in spe- cific sectors of the economy and out- lines some of the key data gover- nance themes that need to be ad- dressed to facilitate data sharing between organizations. Data value chains that cut across or- ganizations currently do not exist. Foundational standards are needed to bring clarity to intended users across new data value chains, estab- lish common parameters, allow for interoperability, and set verifiable data governance rules to establish and maintain trust between partici- pants and with regulators. In order to be successful, new data value chains will have to address a number of data governance issues that are currently impeding data sharing and exchange between or- ganizations. Standards framing data collection and grading; data access, storage and retention; and data ana- lytics and solutions will need to pro- vide guidance on the following themes: • ownership / Intellectual Property IP/copyright • data quality and valuation • interoperability • safe use Big data creates new opportunities for businesses and consumers, and new challenges for security and pri- vacy. The use of data, whether sold to third parties or used by firms to ad- vertise or tailor their own products, has become integral to business models. Data-intensive technologies such as artificial intelligence AI and the Inter- net of Things (IoT) offer greater con- sumer choice and personalisation. At the same time, they pose new risks to safety, privacy and security, and may discriminate against disadvantaged groups such as women and ethnic minorities. The G20 is developing policies to raise awareness about privacy and data protection frameworks and strengthen their enforcement, while promoting accountability for data controllers. the BANKING EXECUTIVE 12 ISSUE 155 NOVEMBER 2021