Major US Banks and Fintechs from Open Banking Group

1 de Noviembre, 2018

Tiempo estimado de lectura: 2 minutos

The Group will aim to develop a common interoperable standard for consumer data sharing within the financial services industry in a manner that maintains security, while driving innovation.

Bank of America, Citi, JPMorgan, and Wells Fargo are among the founding members of FDX, along with fintechs including Intuit, Xero, and Yodlee.

Up to this point, incumbents in the US have been reticent to share consumer data with third parties, citing regulatory and security worries. This is an uneasiness also shared by customers in the US, where close to two-thirds of fintech users are extremely or very concerned about data privacy and data sharing, per research from The Clearing House. However, fintechs and third parties argue that, despite their concerns, consumers want the option to share their financial information and control their data — a point supported by the Clearing House study, with the majority of respondents (56%) claiming they would like to determine the type of financial account information and data third parties can access.

The FDX aims to resolve this tension with a common standard based on an application programming interface (API), dubbed the Durable Data API (DDA). The DDA, according to FDX, will provide consumers with improved access authorization controls to give them better control over their personal financial data. Giving financial institutions (FIs) a framework for sharing data securely with third parties will enable better access to consumer information for fintechs looking to develop more personalized products.

While the US lags behind on open banking, FDX is more evidence that momentum is building. We’ve seen rapid adoption of open banking globally, with the introduction of PSD2 in Europe, Open Banking in the UK, and similar legislation set to be introduced in Australia and Hong Kong. In the US, there is no legal requirement mandating FIs to share consumers’ financial data with third parties. Instead, as the launch of FDX as well as BBVA’s recent decision to launch its Open Platform in the US suggest, the shift toward open banking in the country is seemingly being driven by FIs. It’s likely that major banks are warming to open banking as they come to realize the need to innovate to compete with fintechs, especially as consumer attitudes swing in favor of fintech services. Broadly, these developments are good for the US financial services industry, as they will keep it from being left behind Europe and other major economies on the innovation front.

Fuente: Business Insider

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