Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators.
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Monthly FDATA Member Spotlight: EQ Bank
This month’s Member Spotlight features Cathy Ly, Vice President of Customer Experience and Operations, who tells us how challenger banks like EQ rely on customer-permissioned data access to offer custom and competitive financial services to a wide array of Canadians:
FDATA NA News
FDATA Applauds CFPB’s Release of Small Business Panel Proposals for Section 1033 Rulemaking. The Consumer Financial Protection Bureau (CFPB) has published proposals for the upcoming Small Business Regulatory Enforcement Fairness Act (SBREFA) panel for the Dodd-Frank Section 1033 rulemaking, and FDATA is applauding the CFPB for this timely release. This outline marks the first concrete step towards the implementation of an open finance system in the United States and affirms that consumers should have complete control over their financial data. If implemented, the framework envisioned within the outline will strongly align with the goals that FDATA North America has long supported: a national, technology-neutral financial data portability standard that will allow consumers to select in a more competitive ecosystem from the financial services providers that can best improve their financial wellbeing. We applaud the CFPB staff and Director Chopra for their diligent work and look forward to working with the CFPB to promote an expansive, customer-centric proposed rule to implement Section 1033 of the Dodd-Frank Act.
FDATA Highlights Importance of API Standards and Monitoring. As both Canada and the United States continue to move toward open banking via APIs, it is essential that minimum API standards be set in open banking frameworks to ensure that consumers and SMEs have uninterrupted access to their financial data. To this end, FDATA has developed four principles that will be critical to the design of a well-implemented API environment in North America. These principles cover data scope, reliability standards, fallback options, and the necessity of establishing a neutral monitoring agency.
Member News & Activity
Codat published an article in Fintech Times explaining how open banking could be the key to reducing the funding gap for small businesses. Codat uses its recent research, which found a negative attitude toward available financing options among SME decisionmakers.
DirectID recently announced a partnership with SME capital provider GOT CAPITAL, which will allow SMEs applying for financing to use the power of Open Banking within the application journey and allow agents at Got Capital to quickly categorize and determine businesses’ true revenue without the need for PDF or paper bank statements. This new solution will allow for a much faster and accurate process, de-risking the financing while providing a better experience for SMEs.
Fiserv’s Vice Chairman Frank Sanchez joined the Tearsheet Podcast to discuss the promise and challenges associated with next generation cores, how fintechs are leveraging them in pushing open finance forward, what sets them apart from legacy banking cores, and what innovations we can anticipate in the near future.
Flinks published a new blog post by its product marketer Alex Coleman entitled, “Open Banking: Building or Buying,” which describs the state of open banking in several nations and explains the role of data intermediaries, particularly data aggregators, in establishing connectivity between financial institutions and consumers and SMEs.
Interac sponsored an event in Ottawa on open banking. Hosted by The Globe and Mail, the event featured panels that discussed the framing of open banking, data privacy and security, and accreditation and liability. Abraham Tachjian, Canada’s Open Banking Lead, closed the event by discussing what’s next for open banking now that the work of the working groups is coming to a close.
Kabbage was listed as a winner for this year’s IBSIntelligence NeoChallenger Bank Awards 2022. This recognition showcases its commitment to backing small businesses through innovative and impactful banking technology.
Morningstar ByAllAccounts published a whitepaper entitled “Open Banking for Wealth Management in the United States,” which advocates for open baking within the investment and wealth management sphere. The whitepaper explains how today’s open banking direct data connections provide reliable and secure access to the critical data necessary to provide personalized advice and maximize positive client outcomes.
MX’s Bose Chan, Head of Strategic Partnerships, joined the LiminalStrategy State of Identity podcast with Cameron D’Ambrosi to discuss what open banking means for banks, how it differs from end users or non-banking entities, and what to consider when building open banking capabilities.
Plaid’s Ginger Baker wrote a post for their blog entitled, “Access to financial data helps consumers navigate a difficult economy.” The post detailed how the growth of fintech adoption will increase the role that financial service providers have in helping their consumers tap into the benefits of data connectivity. The post included a link to Plaid’s recently published report, “The Fintech Effect: Stability, Impact, and Building for the Future,” which offers the latest data on consumer trends and insights on the future of digital finance.
Trustly welcomed back its founder Alex Gonthier, who will now operate as CEO of its Americas division. They were also featured in FinExtra’s first-ever North American 2023 Digital Banking Report where Nate Marquiss, Trustly’s Head of Finance, gave his expert take on what the future holds for Open Banking. They also published this blog post which highlights some key takeaways from this year’s G2E Summit, where they explored the future of all things Open Banking in the Gaming industry.
Vaultree has been shortlisted as one of the Top 50 global startups for the 4 Years From Now (#4YFN23) Awards 2023.
Vopay CEO Hamed Arbabi wrote an article for Fintech.Ca entitled, “Financial Inclusion Is Our Next Economy,” which detailed the reasons why many Americans remain unbanked, the risk of a cashless society, and how consumers could be better served by digital financial services.