Regulatory Compliance and Financial Regulation Challenges in Cross-border Financial Data Flows under AI Governance

This paper studies regulatory compliance and financial regulation issues in cross-border financial data flows under the new circumstances of increased application of artificial intelligence (AI), cloud computing and data-intensive analysis in finance. Although it does not provide new empirical data, cross-border financial data activities can be viewed in light of data protection, trade in services, prudential supervision, digital operational resilience and internal governance. AI is not the reason for the legal dispute; rather, it may have increased the scale and speed of data processing and increased dependence on external technology providers. Therefore, this paper will investigate the impact of the current cross-border data regulations, financial supervision requirements and regimes for digital operational resilience on AI-powered and cloud-based financial activities, as well as coordination deficiencies. Based on legal texts, materials from international standard-setting organisations and peer-reviewed research, this paper conducts a normative and conceptual analysis to distinguish between binding legal obligations and non-binding regulatory guidance or suggestions for compliance put forward in this paper. Several levels of context-aware reading for cross-border financial data governance have been provided, but no new global governance system has been proposed, and there is no claim or presentation of a causal effect of specific regulatory measures.