Cross-Border Data Flows: Powering the Future of Trade with Open Finance

 

 

Open finance holds immense potential in powering economies. On this panel, speakers address what it takes to power the cross-border data flows that will enable open finance.

 

1. Introduction of Project Aperta

Hakan Eroglu of the BIS Innovation Hub – Hong Kong Centre, shares how the Bank for International Settlements (BIS) is advancing open finance through Project Aperta, which aims to enable cross-border interoperability in data exchange, promoting a global, secure, and connected open finance ecosystem.

  • Project Aperta's goal: To make open finance interoperable across borders, ensuring seamless data portability and the secure exchange of data.

  • Three core components:
  1. Harmonisation: Ensuring different APIs are compatible for smooth data transfer.
  2. Data security: Implementing end-to-end encryption to protect data during transfers.
  3. Trust frameworks: Enabling mutual recognition of licenses and trust across jurisdictions for cross-border functionality.

 

2. Cross-border data portability

Jane Moore of the Financial Conduct Authority (FCA) addresses key challenges in aligning regulatory and technical frameworks for cross-border data portability.

  • Benefits of cross-border data portability: Interoperability will help global financial markets grow, reducing friction and costs in cross-border transactions; it also facilitates regulation, transparency, and innovation across jurisdictions, benefiting firms and consumers.
  • Challenges in implementation: Moore highlighted several key challenges including regulatory alignment, technical compatability, trust frameworks and data exchange standards.

 

3. Cross-border data flows, e-commerce and digital trade

Panellists address how Project Aperta fits into the broader context of global e-commerce, open finance, and digital trade, highlighting both the benefits and challenges of advancing data sharing and trade digitisation across borders.

  • Challenges beyond data sharing:
    • Legislative Barriers: Legal titles in global trade are often tied to outdated laws that have not kept pace with technological advancements. The UN's Model Law for Electronic Transferable Records is a significant step in addressing these challenges.
    • Standardisation Issues: Fragmented data standards, identity protocols, and security protocols pose barriers. Collaboration, such as the ICC Digital Standards Initiative, is working to address these gaps.
    • Complex global ecosystem: Global commerce spans both physical and financial supply chains, and overcoming fragmentation requires collaboration across various actors, regulations, and incentives.

 

4. Key takeaways from Project Aperta

  • Principles of Interoperability: Unlike previous efforts that created isolated "walled gardens", Aperta aims to break down barriers by fostering global collaboration, particularly for SMEs and corporates who often face challenges connecting across different platforms and ecosystems.
  • Focus on public good: Aperta helps to promote open standards and reduce fragmentation in global trade. This approach ensures that the benefits of digitisation are accessible to all rather than being confined to proprietary ecosystems.
  • Leveraging existing assets: One of Aperta's key strengths is its commitment to building on the work already done by other organisations, such as CPMI and APEX's work on APIs or ICC and SWIFT's work on trade standards. By leveraging existing assets and capabilities, Aperta aims to accelerate progress without reinventing the wheel.
  • Collaborative approach: Aperta’s collaborative approach is seen as a promising way to drive the digital transformation of global trade. By connecting established systems and ensuring seamless data sharing, Aperta aims to create an ecosystem that benefits all.

As we look towards the future of global e-commerce, the key to unlocking its full potential lies in legal harmonisation, rich data standards, and seamless collaboration across borders. With initiatives like Aperta, we are paving the way for a more interoperable, inclusive, and efficient global trade ecosystem, where SMEs and businesses of all sizes can thrive.

 

Watch Full Session

 

 

Speakers:

  • Hakan Eroglu, Advisor, BIS Innovation Hub – Hong Kong Centre
  • Jane Moore, Head of Department, Payments & Digital Assets, Financial Conduct Authority
  • Louise Taylor-Digby, Global Head of ESG Value Propositions, Swift & Vice Chair, ICC Banking Commission, Swift

 

Moderator:
  • Nilixa Devlukia, Chief Executive Officer, Payments Solved
 
 

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