Betterment: How Open Banking Enhances Goal Projections and Risk Analysis
As a leading digital investment advisor, Betterment leverages open banking to provide clients with more accurate financial guidance. Here’s how open banking can further enhance the services Betterment offers:
Enhanced Goal Projections:
Betterment offers savings and withdrawal advice by projecting returns and volatility for assets in client accounts. With the help of Plaid, clients can link external accounts—like investing, cryptocurrency, checking, and savings accounts—to their financial goals. These linked accounts allow Betterment to deliver a more comprehensive view of whether clients are on track to meet their goals. As open banking expands through policies like the CFPB’s 1033 rule, linking external accounts will become even easier, leading to more precise and personalized financial advice.
Improved Risk Analysis:
Betterment also provides advice on asset allocation and risk management tailored to client goals. By analyzing the risk levels of both Betterment and linked external accounts, clients receive feedback on whether their risk exposure aligns with their financial objectives, such as retirement or emergency funds. Open banking will further refine Betterment’s risk analysis by enabling access to more detailed and reliable information from clients’ external accounts, ensuring that investment strategies are well-informed and appropriately balanced.
As open banking continues to evolve, Betterment remains committed to offering clients enhanced financial insights and more accurate, data-driven advice, empowering them to achieve their financial goals with confidence.
