Examples include:
- Cross-border microlending. Microfinance institutions use technologies based on data transfers to provide better loans and achieve greater repayment rates and lower interest rates for applicants. For example, in many developing countries, local financial institutions are able to offer micro-loans to citizens and businesses that would not otherwise have access to credit, using cloud-enabled data analytics to determine credit risk profiles and deliver loans through automated processes.
- Cross-border remittances. More than ever, remittances are of vital importance in developing countries. According to the World Bank, remittances to low- and middle-income countries reached a record high of $529 billion in 2018. Companies are also exploring the use of emerging technologies such as blockchain to provide speedier and cheaper remittance processes. Financial institutions that participated in the program reported savings between 40–70% in foreign exchange costs, and payment times averaging just a few seconds.
- Cross-border data transfers and financial transparency. From an anti-corruption and anti-money laundering perspective, increased use of “mobile transfers” and “mobile money,” which often depend upon cross-border access to cloud-based financial service platforms, allow for enhanced transparency in public sector spending; reduced corruption and “off the books” cash transactions; and increased confidence, efficiency, and predictability in the banking system. Access to cross-border technologies also allows for data analytics that are better able to identify potential cases involving money laundering, terrorist financing or other criminal financial transactions. In these ways, cross-border data transfers enhance financial legal compliance and improve the ability of financial regulators to identify and respond to emergent criminal activity or other risks.
