Regulatory Compliance and Financial Regulation Challenges in Cross-Border Financial Data Flows Under AI Governance (International Journal of Global Economics and Management)

Summary

• The conceptual study evaluates regulatory compliance and financial regulation issues in cross-border financial data flows, published in Volume 10, Number 10 of the journal.p.1
• The OECD Privacy Guidelines were initially released in 1980 and updated in 2013 to place greater emphasis on accountability and interoperability.p.2
• Under GATS Article XIV(c)(ii), countries may enforce personal data protection measures, while prudential exceptions are separately covered under paragraph 2(a) of the Annex on Financial Services.p.2
• The Basel Committee's Principles for the Sound Management of Third-Party Risk were issued in 2025 to provide supervisory guidance for managing third-party risks beyond traditional outsourcing.p.3
• The EU Digital Operational Resilience Act (DORA) entered into force on January 16, 2023, and took effect on January 17, 2025.p.4
• Commission Delegated Regulation (EU) 2024/1774 defines binding final regulatory technical standards supplementing DORA for ICT risk management tools and policies.p.4
• Cross-border transfers of personal data to third countries or international organisations must comply with Chapter V of the GDPR.p.4

Key insights

1. Artificial intelligence applications in finance expand the scale and speed of data processing while increasing systemic reliance on cloud platforms and external model providers.p.1
2. Measures affecting non-personal cross-border data flows include mandatory data sharing, regulatory access mandates, local-storage rules, and transfer restrictions.p.2
3. The FSB 2025 monitoring report highlights that AI vulnerability monitoring remains early-stage due to data deficiencies, classification issues, and third-party concentration risks.p.3
4. Cross-border financial data flows generate a dual requirement of building operational data systems while guaranteeing reliable regulatory access for prudential oversight.p.4
5. Under DORA, Lead Overseer arrangements directly supervise designated critical ICT providers, while financial institutions remain responsible for their internal risk management and audit rights.p.4
6. Inconsistencies in national legal and regulatory data frameworks create operational friction that increases the cost and reduces the transparency of cross-border payments.p.5