Cross-Border Data, Compliance Screening and Procedural Safeguards: A Structural Risk Assessment for the Digital Economy and Financial Integration in Latin America
This report explores the critical role of cross-border data exchange in Latin America’s modern financial architecture. It focuses on the risks arising from the use of automated compliance screening systems that aggregate information from sanctions lists, adverse media, and international databases. The study analyzes how data errors or outdated records can lead to the unjustified financial isolation of legitimate market participants.
The research examines in detail the problem of data contamination and the longevity of negative reputational traces. In the context of total banking digitalization, algorithmic decisions are often made without sufficient human oversight, creating barriers to fintech development, e-commerce, and cross-border investment. The report emphasizes that the lack of transparent mechanisms to challenge automated decisions undermines trust in the region’s digital infrastructure.
Significant attention is paid to the implementation of transparency standards and procedural safeguards. The author proposes the “Data-to-decision audit trail” concept, which enables the tracking of data from its source to the final decision-making point. Recommendations are formulated for regulators and development institutions to create effective data rectification and clean-up mechanisms, essential for balancing security requirements with the support of digital integration in the region.
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