A fragmented patchwork of data privacy rules threatens to upend the promise of new developments in financial technology across Asia, a leading trade body has warned.
Asifma, the financial industry’s regional trade association, highlights the challenges faced by firms in grappling with a multitude of regulatory mandates and suggests that policymakers focus on broad principles rather than precise rules.
“Data privacy rules have a particularly strong impact in the fintech space, where solutions are largely driven by the use of data and rely on cross-border data flows to scale their products,” says Mark Austen, CEO of Asifma. “Different interpretations of data privacy rules and definitions can create legal uncertainties which impact confidence to operate across markets, and data localisation requirements present significant costs to new firms that keep them from expanding into new jurisdictions.”
Asifma recommends that data privacy laws should be focused on outcomes rather than process, and that they should be location and technology neutral. It is also calling on rule-makers to agree terms for cross-border data sharing and the outsourcing of functions to third parties.
“While there should be limits on what can be transferred across borders and minimum protections for how information is stored, regional harmonisation would provide a level of legal certainty,” says Austen. “This would help facilitate the continued growth of new technologies and innovative fintech ecosystems across the region.”