Research On Financial Data Localization Requirements

As our country increases the level of opening up of the financial industry to the outside world,data localization has become an important obstacle to be faced in the process of cross-border flow of financial data.The nature of financial data itself determines its need for free cross-border flow and reduced localization restrictions.Excessive localization of financial data has significant drawbacks.Therefore,this paper prefers to investigate how to reduce the localization requirements of financial data and facilitate the cross-border flow of financial data.By analyzing what factors lead to the localization of financial data,suggestions are made for reducing the localization of financial data in China.First,there are some drawbacks to the localization requirements of financial data.It hinders the development of the country’s financial business and cross-border economy,is detrimental to the regulation of cross-border finance,and disguises a higher barrier to entry to the financial market.So the transformation of data localization began to be sought,starting from the localization of financial data allowed in principle to explore the prohibition of localization in principle.The main difference between principle-permitted localization and principle-prohibited localization is that principle-prohibited localization has provisions that explicitly prohibit the localization of financial data;RCEP and EU personal financial data transfer to foreign countries all allow data localization.Data localization prohibited by principle has some conditions that allow localization: localization of financial data can be required when cross-border regulation is not met or when public safety exceptions,prudential exceptions,and exceptions to protect personal privacy are met.Second,a country’s choice of the type of financial data localization can be influenced by a combination of factors.One is the trade-off between data sovereignty and financial interests,with an emphasis on sovereignty favoring localization and a focus on financial interests the other way around.Second,the security of cross-border personal financial privacy data.The protection of customer consent terms in the process of cross-border financial data flow is insufficient,and the problem of privacy leakage is difficult to solve;in the absence of reliable means to solve these problems,financial data localization becomes an effective method for personal privacy protection.Third,the cooperation of international financial data regulation: the small influence of international financial organizations on data flow and the cooperation of financial regulation between countries due to different regulatory concepts and jurisdictional conflicts lead to the localization of financial data.Fourth,the development needs of the financial industry,which also has an impact on data localization.In addition,there is the influence of political factors.Based on the comprehensive judgment made by these factors,each country develops its own financial data localization rules.Finally,the analysis of China’s financial data localization and the above-mentioned factors reveals that the localization requirements of financial data in China can be reduced under the condition of adhering to data sovereignty and regulation.The data localization requirements to protect personal financial privacy can be replaced because there are other methods to protect personal privacy.To enhance cooperation in international financial regulation,our country can also take the initiative to reduce financial data localization measures.However,from the perspective of developing the financial industry,the reduction of financial data localization requirements needs to be implemented gradually.