Data sharing

Meredith Fuchs, formerly the top lawyer at the Consumer Financial Protection Bureau, says data aggregators like Plaid "have matured." She will help the company prepare for new data-sharing rules and its pending sale to Visa.

Banks, data aggregators and fintechs have clashed for a decade over how consumers’ bank account data should be shared with third parties. The agency says it will offer a plan, and industry officials have plenty of suggestions already.

Lenders need to use alternative data as an overlay to traditional underwriting methods to help creditworthy customers in hardship because of the coronavirus crisis.

For the past several years, the concept of sharing transaction data between merchants, processors and issuers has been considered a good security measure to curb fraud. But someone has to compile and compare that data in such a way to not only stop fraud, but assure legitimate transactions are not declined.

Thanks to their close relationship with the card networks, banks stand to benefit most from deals like Mastercard’s agreement to buy Finicity and Visa’s pending purchase of Plaid. The prospects for fintechs and consumers are dicier.

The Toronto company is testing new software from Cinchy that lets its technology teams visualize how datasets spread across departments might work together to make client referrals or collaborate with fintechs.

The company's new service is intended to help small banks share account data while avoiding screen scraping.

Ben Soccorsy, head of digital payments in Wells Fargo’s virtual channels group, explains how the bank's 15 data-sharing agreements with fintechs and aggregators and tools like Control Tower give customers visibility into and control over their financial information.

The agency's recent update to its guidelines for banks on working with data aggregators and other third parties was not extreme, but some critics say its heavy emphasis on security could be a setback for open banking.

A CFPB event on data-sharing issues gave the parties a chance to debate the merits and risks of screen scraping, what can replace it and what consumers really want.

The heads of the two companies explain how the deal came about, what hurdles they face and how they plan to mash up their very different operations.

Akoya has been building a data-sharing network that gives fintechs access to bank account data through application programming interfaces as an alternative to screen scraping. JPMorgan Chase, Bank of America and Capital One are among its new owners.

When it comes to customers using application programming interfaces, the bank appears to be outpacing its rivals.

The U.S. banking system risks being left behind by the European Union and the United Kingdom when it comes to open banking.

Moving to an open banking system comes with both costs and benefits that each bank will need to weigh before diving in.

Banks in the U.S. should take note of these requirements before opening their systems to third-party developers.

Visa's deal to acquire the data aggregator Plaid is likely to have ripple effects throughout the industry, including reduced tension between banks and fintechs over data sharing.

Financial institutions need to be aware of the platform model, strategic and reputational hazards that come with granting access to their networks.

Silicon Valley giants are better innovators, software developers and data managers, but banks' inherent advantages shouldn't be discounted, says Sonny Singh, a senior vice president at Oracle.

PNC, Plaid and Venmo have been blamestorming over customer data-sharing issues of access, security and consent.