FDATA North America August Newsletter

by rebecca

FDATA North America Monthly Newsletter for August 2024

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. Know someone who’d like to receive these monthly updates? Send them here to sign up.

FDATA North America News

FDATA North America Responds to the CFPB’s BNPL Interpretive Rule. On July 24, 2024, the Financial Data and Technology Association of North America (FDATA) submitted a letter to the CFPB’s interpretive rule classifying Buy Now, Pay Later (BNPL) loans as Regulation Z-regulated products under the Truth in Lending Act. FDATA commends the CFPB for including BNPL loans as “covered data” under the forthcoming Section 1033 rule of the Dodd-Frank Wall Street Reform and Consumer Protection Act, enabling consumers and small and medium-sized enterprises to share their balance and transaction information with third parties, enhancing financial transparency and empowerment. This classification will help consumers make informed financial decisions and better manage BNPL loans. FDATA also urges the CFPB to expand the types of accounts covered under Section 1033 to ensure all consumers can access and share their financial data with robust privacy and security protections. FDATA released a statement on its submission of the letter, which can be found here.

FDATA North America Submits 2025 Pre-Budget Submission to Canadian House of Commons’ Standing Committee on Finance. On July 26, 2024, the Financial Data and Technology Association of North America (FDATA) submitted recommendations to the Canadian House of Commons’ Standing Committee on Finance (FINA) for the 2025 budget, emphasizing the need for the rapid and well-governed implementation of Canada’s open banking system and its expansion into an open finance framework. FDATA urged the Canadian government to include language in Budget 2025 to ensure open banking implementation, outline the approach to open finance, and ensure that the Financial Consumer Agency of Canada (FCAC) governs the system in a way that does not dissuade smaller entities from participating. FDATA highlighted the importance of Budget 2024’s delivery of the initial CDB framework and called for Budget 2025 to ensure delivery of open banking, including small business accounts in the first phase, and appropriately tier FCAC enforcement based on size, complexity, and use case. FDATA released a statement on its submission of the letter, which can be found here.

Member News & Activity

Basis Theory published a blog highlighting the benefits of tokenization for merchants, emphasizing improved security and reduced friction in purchase processes. However, they also outlined five pitfalls to avoid, such as using the wrong kind of token, neglecting programmability and storage, misunderstanding maintenance obligations, ensuring PSP compatibility, and managing underlying data properly.

Envestnet hosted their Data Driven Finance Podcast with Steve Boms, Executive Director of FDATA NA, where he explained that having existing data privacy frameworks in place for financial services enables the advancement of open data ecosystems like open banking, as seen in markets such as Canada, where consumers are granted a fundamental data portability right. Steve noted that Financial services organizations should strategically position themselves to leverage this framework for improved user outcomes and ensure compliance with upcoming regulations to interact with this data.

Method was featured in BAI with their op-ed discussing the integration of open banking into traditional bank branches. They highlighted how Personal Identifying Information (PII) authentication can bring the efficiency of digital banking to in-person transactions, enhancing the borrower experience. Despite the rise of digital banking, brick-and-mortar locations remain crucial for financial equity, especially for marginalized populations.

MX posted a blog highlighting the transformative potential of AI in banking. Key opportunities include enhancing data analysis for smarter insights, improving operational efficiencies, promoting financial inclusion, advancing fraud detection, and delivering personalized customer experiences at scale.

Pontera published a blog emphasizing the increasing need for personalized, professional 401(k) guidance as more Americans rely on 401(k) plans for retirement income. Research shows that professional advice significantly improves financial outcomes, with many savers feeling more confident about meeting their retirement goals when supported by advisors.

Plaid published a blog outlining their solutions for data providers to prepare for the upcoming Section 1033 regulation, which will enhance consumer protection and promote financial transparency in the open banking ecosystem. Their offerings, including Core Exchange, Permissions Manager, and App Directory, aim to simplify compliance, improve data connectivity, and meet consumers’ expectations for secure and efficient digital financial experiences.

Trustly was featured in a PYMNTS article discussing its partnership with Lenovo to offer open banking at checkout for customers in the U.K. and continental Europe. This partnership provides a more secure and cost-effective payment method, allowing direct bank account payments with lower fraud rates and instant refunds, compared to traditional debit and credit card transactions.

VoPay CEO Hamed H. Arbabi was featured on the Leaders in Payments Podcast, where he highlighted two pivotal changes shaping the future of payments. He emphasized the seamless integration of payments into various industries, making them autonomous and embedded within software, and the unification of payment rails, allowing for easier global access across different payment methods under unified service providers.

Events and Submission Deadlines

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