As the industry works to improve the way online banking information is shared with personal financial management apps, a debate is brewing over whether to end the decades-old practice of screen scraping.
Proponents of the popular method say it is a valuable supplement to direct data feeds that may be incomplete or out-of-date. But screen scraping also raises risk concerns, since like other data collection methods it requires consumers to cough up their banking credentials.
"I have not talked to a bank that hasn't confirmed it's a growing problem in their organization," said Jim Routh, the chairman of the products and services committee at Financial Services Information Sharing and Analysis Center.
Financial institutions worry that data aggregators may not take all the appropriate security precautions. According to the FS-ISAC, an industry organization, startups are entering the aggregation market without making security a higher priority.
Routh, who is Aetna's chief information security officer and a former global head of application and mobile security for JPMorgan Chase, said the upstarts do some things well, but "protecting credentials isn't necessarily high on their priorities." The problem is worsened by data aggregators that collect marketing data, such as the device a consumer is using, to understand their behaviors across channels, he said.
The FS-ISAC has proposed creating a standard application programming interface to share information from bank accounts. The API would serve as the conduit for data when consumers wish to use a web or mobile app to receive push bill reminders, to verify their bank accounts or for numerous other PFM use cases.
The proposed API would also be designed to reduce the storage of financial data. But if the industry embraces the model, it would be harder for aggregators to do screen-scraping.
For years, PFM companies have used this tool to obtain customers' banking account information. With consumers' permission, aggregators log in with the customer's user name and password to grab financial data and use it to populate the mobile or web app of the customer's choice whether or not the bank supports the technique.
Yodlee, which works with more than 300 banks as well as startups, argues that there is a place and a need for aggregators to collect data through various techniques to provide the best customer experience.
Brian Costello, vice president of operations and security at Yodlee, said his company uses a combination of methods to gather customer account data. If it couldn't get data from a direct feed, it could also screen scrape.
If the industry moved to embracing only one data exchange method, Yodlee could be more vulnerable to the problem of receiving outdated information from the banks.
When a bank changes an annual percentage rate, if it doesn't update the data feed it sends to the aggregator right away, the PFM services that rely on that data will appear stale. (Services like Credit Karma, Mint and Wallaby, for example, rely on aggregation technology to recommend financial products to consumers according to price, among other things.)
Proper maintenance of data feeds, of course, takes time and money resources many banks are short on. But delays could also result from the bankers' dilemma: On the one hand, they want to let customers aggregate their accounts to gather intelligence on their competitors. On the other hand, they may have reservations about their rivals collecting that same data in the battle for wallet share.
"Banks are under tremendous pressure to retain and obtain more clients," said Costello.
Screen scraping also has maintenance requirements, though. The FS-ISAC white paper draft said the approach "requires some coordination from the FI to allow what appears to be an automated attack against their application. To avoid blocking the aggregator's attempt to screen scrape the financial institution's application with this or other current security controls, a whitelist of aggregator IPs are set up and maintained by the FIs."
Like Costello, Marc West, president of digital channels at Fiserv, said a combination of data collection methods is better than a standard data exchange approach that might fail to extract the necessary information. Any data feed, said West, offers a limited set of data and information, while a scrape can enable a custom data extract.
But Aetna's Routh said moving to a real-time API model would improve a recurring issue caused by screen scraping: customer service hiccups. A consumer may call the company behind the personal financial app when a link to an account is broken. The PFM provider might tell him to call the bank, when the problem could lie with the aggregator not knowing of an update to the bank's code.
"The consumer gets in the middle of a customer service issue that is thorny at best and unsolvable at worst," Routh said. "Unfortunately that happens more frequently than anyone would like to it happen.
The new model, then, is "inevitable" in Routh's point of view because of the risk and economics involved. "This won't happen overnight," he said. "It needs some legs."
Kristin Moyer, a research vice president in industry advisory services and banking and investment services at Gartner, said she expects more banks to embrace APIs as a way to compete in a digital world.
Already financial institutions like Capital One, Agricole Bank and Fidor Bank are piloting and testing the OAuth specification, which lets banks keep ownership of the customer log-in data but requires them to make available an API. (The FS-ISAC is also promoting OAuth 2.0 as a way to strengthen aggregation security.)
"It's something we will see a lot more of in the next two to three years," said Moyer. "It's an exciting time I think the use of APIs will enable us as an industry [to do things] that we never really imagined possible before."
The move away from screen scraping has already happened in some countries that lack a data exchange standard. Regulators in Poland, for example, recently recommended the practice halt. Responding to the guidance, mBank is one of the banks that changed its aggregation roadmap.
The bank, which spun off from BRE Bank, had been piloting a PFM service with friends and family and has now suspended the pilot. It had, however, already made use of aggregation technology so consumers, who weren't customers of the bank, could get loan decisions from mBank within half an episode of "Modern Family." Indeed, the bank would screen scrape consumers' external bank accounts to make a loan decision within five to 15 minutes. Now, loan decisions have to be made at a branch or for a smaller dollar amount after a consumer sends the bank a copy of an electronic statement.
"Right now we have to put it on the shelf. We haven't killed it. We want to resurrect it," said Michal Panowicz, senior director at mBank.
Overall, he sounds calm about the setback. "This is a regulator decision," said Panowicz. "We have to respect that. We have to live with them on good footing."
But that doesn't mean it has given up on aggregation. Payday lenders can continue to screen scrape financial data in order to make loan decisions in Poland which makes it an uneven playing field.
"We will try to convey the logic that [screen scraping] cannot be stopped," said Panowicz.
He views it as a longer term game for something he believes is valuable to consumers. mBank like other banks wants to realize the true aggregation dream: letting customers quickly switch bank accounts and products if they wish.
"To be honest, it's the most exciting part about aggregation... to move accounts to us without spending a minute of physical labor," he said.