19Dec-JAN 2021INSIGHTSCXOThe prominence of data privacy and customer data at the World Bank & IMF Annual Meetings indicates a drastic shift in thinking for technology across the world. Historically, technology has been perceived and governed as a vehicle within sectors rather than a stand-alone entity requiring their own oversight. Data is today's digital world has become so pervasive that we are just now beginning to understand the global overallocation of risk.Data and artificial intelligence while closely intertwined, present their own challenges and risks from a policy and governance perspective which will be addressed independently. The data itself presents incredible risks within cybersecurity, third party exploitation, and antitrust violations on the US domestic and international scale. Australia and the EU are leading the pack internationally through policy implementations of GDPR in attempts to control data privacy and enhance consumer protection, but the governance and regulatory framework speak to larger gaps from a US domestic perspective. While it sets the standards for data privacy, the EU also has Data Processing Agreements (DPAs), like technology and financial service industry Service Level Agreements (SLAs), that ensure the demonstrated compliance with applicable GDPR. These artifacts can be used to defend or enforce violations with the legislation with the European Data Protection Board (EDPB), which is the oversight authority within the EU for GDPR. Both the policy and enforcement agencies are major gaps in the United States that make simple adoption of GDPR infeasible for our current regulatory framework and architecture.The twin peak model of the United States regulatory architecture would require a federated approach to GDPR implementation that would apply the principles within specific sectors. Additionally, the oversight authority would need to be relegated to existing oversight agencies, while also establishing an independent oversight authority and it remains unclear to whether that is politically feasible in the US. With China being the second largest economy next to the United States and also a major owner of US sovereign debt, the United States' is in a precarious position which makes remaining the technology leader of the world ever more important and potentially disincentivizing their desire for robust oversight of technology practices or companies. While Japan becoming the majority owner of US sovereign debt in 2020 helps to reduce the threat for the US from foreign manipulation, (Japan and China owning 18.67% and 15.88%, respectively), the sovereign debt crisis of the United States presents the potential for competing priorities to technology regulation with technology, accounting for a significant portion of our economic activity. As the largest tech market in the world representing 32% of the total, the United States' responsibility and exposure creates hurdles for data privacy By Melissa Murphy, Head of U.S. Regulatory Technology at Scotiabank
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