As large banks shift away from screen scraping and toward directly sharing consumer data with third parties, largely citing security concerns, data aggregators like Envestnet Yodlee come at the issue of data sharing from a different angle.
The key issue from Envestnet Yodlee's point of view is that consumers should have unfettered access to their own financial data, John Bird, vice president, product marketing and alliances at the data aggregator, said Tuesday. He spoke after Wells Fargo announced that it would be sharing data with a business accounting software firm using an
"We want to be the consumer advocate," Bird said. "We believe that secure and open access to your transaction and investment position data is critical to being able to manage your financial health."
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The archaic practice of using customers' online banking credentials to copy and paste their account information into other programs has been under fire. With a new API, Wells Fargo hopes to bring this practice to an end.
June 7 -
Application programming interfaces allow software programs to talk to each other. They are a potential solution to the current industry standoff over sharing of bank customer data with aggregation sites; in the long term, they could transform how banking is done, making customer relationships less sticky but opening up new revenue models for financial institutions. This paper lays out the basic issues surrounding APIs.
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In a few instances, banks have temporarily blocked data aggregators from screen scraping customers' bank account information. Are the banks exercising appropriate judgment or obstructing potential competitors?
November 12
Banks are realizing they need to be able to provide that access, he said. But "banks don't want to give access to everything," he said. "What's clear and what
Screen scraping means allowing data aggregators to copy and paste consumers' online banking data into other applications by using their user names and passwords. The problem with this is that it's like handing a valet your car keys and trusting him not to take the vehicle for a joyride. Yodlee says it performs screen scraping in a secure way, but it also has direct data feeds set up with several large banks for which it provides data aggregation and personal financial management technology.
The banks have all the transaction data on checking and savings accounts and loans, Bird said. "For me to manage my finances and understand how to reach my goals, I need access to that data and I need access to the tools out there that are being developed, because the banks are not doing that. They're developing basic management of the account in house, but it's not a comprehensive view of how to create and obtain wealth."
Through a spokesman, he later added that Yodlee works with 12 of the top 20 U.S. banks and that more than 73% of its data is gathered through direct feeds with financial institutions.
Read our earlier story about Wells Fargo's API partnership with Xero
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