Data sharing

The Consumer Financial Protection Bureau is in the early stages of developing a rule that could give bank customers far more say in how their information is being accessed by fintechs and data aggregators. What the final rule looks like will depend on how much consumers already know about the way their data is collected, stored and sold.

The Consumer Financial Protection Bureau is more than a year away from issuing a proposal on consumers’ right to control the flow of their data between banks and third parties such as fintechs, according to people familiar with the bureau’s thinking. Many previously expected a plan to arrive this spring.

The data aggregator assembled a group of technology companies that has developed a set of security standards for startups. It is open for comment ahead of an anticipated implementation in the second half of next year.

Even with an industry-driven standard in place, some institutions still resist parting with client information.

American banks need the kind of clear rules European institutions have enjoyed for several years if they're to become leaders in sharing consumer data with fintechs.

Vendors including Akoya, Plaid and MX are trying to help banks manage and view their application programming interfaces through data portals as an alternative to scraping consumers’ login credentials.

The bank's technology team was trying to figure out how to develop a system similar to the respected software program of Brown Brothers Harriman's investor-services unit. Now that State Street is buying that same unit, it can drop the project.

The U.S. and its neighbor to the north are each developing frameworks to give consumers control over financial data and allow companies to transfer account information. A recently issued Canadian government report could influence efforts in both countries, analysts say.

The size of the financial commitments was not disclosed, but they add to a $425 million fundraising round that the data aggregator announced earlier this year.

The San Francisco data aggregator has committed to minimizing how much data it extracts from bank accounts.