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Member Spotlight: ValidiFI

Can open finance positively impact the traditional financial services sector? ValidiFI has proven it can.

ValidiFI is a technology company that delivers data solutions to business and financial service providers. Simply: through a combination of technology and strategic partnerships, ValidiFI creates better ways to validate and analyze customer information.

ValidiFI’s data—which is sourced from banks, payment processors, financial platforms, and hundreds of thousands of businesses—comprises the most comprehensive lake of financial information in the industry. Financial services firms harness the data to improve account openings, credit decisions, payment processing, fraud detection, and risk segmentation. Businesses of every size—from new startups to public companies—use ValidiFI solutions to increase sales and facilitate payments.

Take managing underwriting and risk, for example.

It is becoming increasingly difficult for financial institutions to properly segment their applicants while identifying who will be a good and bad customer. ValidiFI’s alternative data solutions help firms identify and segment the risk of applicants based on their employment, income, and bank data. ValidiFI’s Payment Instrument (PI) Risk Score analyzes thousands of attributes to enhance the financial profile of the consumer, helping to mitigate fraud, reduce defaults, and reduce returns.

ValidiFI’s tools also help financial services firms stay compliant with government and organizational regulations. Using Bank Account Validation (BAV), firms can adhere to the Consumer Financial Protection Bureau’s payment provisions. ValidiFI also offers comprehensive Account Validation services to help maintain compliance with Nacha’s WEB Debit Rule.

According to ValidiFI, accessing a greater range of data is essential as the United States and Canada climb their way out of the COVID-19 health and economic crisis. ValidiFI said companies that are able to adapt to change by utilizing alternative underwriting methods and data, for example, will recover and advance more successfully.

ValidiFI joined FDATA North America in March 2021.

President and Chief Operating Officer Jesse Berger said, “Access and insight into the rapidly changing regulatory environment for open banking and finance is crucial. It is vital for the development of innovative financial data and technology products like those offered by ValidiFI and other FDATA members. With FDATA’s support, members are ensuring financial products give consumers and businesses more choices and competitive service offerings.”

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FDATA North America Sends Letter to Canada’s Department of Finance on Next Steps in Delivery of CDF

March 15, 2021, Washington, DC – Today, the Financial Data and Technology Association (FDATA) of North America submitted comments to Canada’s Department of Finance outlining its key recommendations for next steps in the deliver of Customer-Directed Finance (CDF). 

Following the conclusion of the second phase of the CDF advisory committee’s consultations at the end of last year, FDATA North America Executive Director Steve Boms encourages the Department to advance the process of implementing a CDF system in Canada this year by:

  1. Appointing a full-time, senior staffer at the Department as soon as possible whose sole responsibility will be to oversee the design and delivery of a CDF regime in Canada; and
  2. Creating a CDF Implementation Entity tasked with the policy design and implementation of open finance in Canada.

Boms noted that FDATA North America and its members “are committed to seeing CDF become a reality for the benefit of Canadian consumers and SMEs. To achieve this goal, and to provide industry with the policy framework under which such a regime can be delivered, we respectfully encourage the Department to begin implementation of a CDF in Canada by appointing a senior staffer within the Department to be responsible for the delivery of CDF and by creating the CDF Implementation Entity as soon as possible.”

Image result for paperclip iconFDATA North America Submission to the Department of Finance

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), API Metrics, Betterment, Codat, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

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Member Spotlight: Fiserv

Established in 1984, Fiserv is a leading global provider of payments and financial services technology, including data aggregation. Today, the firm, which has been named among Fortune “World’s Most Admired Companies” for eight years running, helps thousands of financial institutions, millions of businesses, and tens of millions of consumers in more than 100 countries move money and access information.

Fiserv is among the world’s most admired companies for good reason. Just consider, for example, how it has revolutionized consumer financial management. The company has made pioneering contributions in digital banking, electronic bill payment, person-to-person payments, and invented the e-bill.

Fiserv understands that consumers are not thinking about financial data – they’re thinking about buying a home or putting a child through college – or if they have enough money in their bank account to go out to dinner tonight and still cover the bill payment that is due tomorrow. Data is at the heart of what Fiserv does every day. From moving more than $75 trillion each year to delivering a better customer experience to preventing fraud, Fiserv enables today’s digital economy while solving real-world problems for real people and real institutions.

Leading financial institutions and technology providers use AllData® Aggregation from Fiserv to access real time consumer financial data from more than 18,000 unique data sources. Given data security and regulatory compliance are crucial, Fiserv is also focused on reducing risk associated with data sharing via its AllData® Connect product.

Fiserv plays a unique role in the market as both an aggregator and data source – with a client list that includes thousands of banks and credit unions. A range of companies as well as consumers rely on account aggregation solutions from Fiserv, from fintechs disbursing wages on-demand, to lenders automating and expediting the lending process, to financial institutions helping customers gain insight into investments and spending. Fiserv brings decades of data aggregation expertise to the industry, striving to improve the secure exchange of financial data, and deliver value to clients and consumers while helping move the industry forward.

Find out more about Fiserv at www.fiserv.com/alldata.

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FDATA North America Responds to US CFPB ANPR on Consumer Access to Financial Records

February 3, 2021, Washington, DC – Today, FDATA North America submitted comments to the US Consumer Financial Protection Bureau (CFPB) in response to its Advanced Notice of Proposed Rulemaking (ANPR) regarding consumer access to financial records, or Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In the submission, FDATA North America Executive Director Steve Boms praised the CFPB for formally beginning the process of crafting a rule in this critically important area following many years of careful examination of the customer-permissioned data access and financial services ecosystems. “FDATA North America strongly supports the authority given to the CFPB by Congress in 2010 to promulgate, by rule, a consumer financial data right that will spur greater financial services innovation and competition and improve consumer financial access and inclusion,” Boms noted.

Boms concluded the association’s submission by encouraging the Bureau “to fully utilize its Section 1033 authority to create a customer financial data right to allow consumers and small businesses to have unrestricted access to technology-based tools that can help them improve their financial wellbeing, along with other important bedrocks of an open finance regime.”

Image result for paperclip iconFDATA North America CFPB ANPR Submission

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), API Metrics, Betterment, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fintech Growth Syndicate, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

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Member Spotlight: Envestnet | Yodlee

A founding member of FDATA North America, Envestnet® | Yodlee® is one of the world’s leading data aggregation and analytics platforms for financial service providers. Our platform has proudly fueled innovation for financial institutions (FIs) and FinTech for more than 20 years, and has refined the art of normalizing, categorizing, and enriching data, making the information derived from these records reliable and insightful. As a result, today Envestnet | Yodlee helps more than 1,400 financial institutions and fintech companies, including 16 of the top 20 U.S. banks, to deliver innovate products and services to more than 33 million consumers across the globe enabling them to live better financial lives

Envestnet | Yodlee’s Financial Wellness Solutions, for example, are white labeled applications that leverage more than 17,000 data sources and incorporate leading data security, regulatory compliance, and privacy practices enabling FI and FinTechs to give consumers the broadest possible view of their investments, savings, and debts. Using Envestnet | Yodlee FastLink, consumers can securely link all of their financial accounts – including credit cards, mortgage statements, rewards programs, and more. The FinApp series also can also provide consumers with expense, income, and cash flow analyses and it estimates net worth, and also uses artificial intelligence to dynamically measure financial health and to create financial forecasts that help manage recurring income and financial obligations.

The company also is leveraging its data to help businesses and policymakers make better decisions. During the COVID-19 pandemic, for example, Envestnet | Yodlee has used its resources and capabilities to help its partners, economists, and lawmakers track and understand the impact the virus has had on American families. The company examines spending trends on a week-to-week basis while also looking at changes in net employment by industry.

Envestnet | Yodlee is an industry leader in making data more accessible and secure via open banking connections. Envestnet | Yodlee provides a trusted and secure open ecosystem for all financial institutions and FinTechs by providing responsible data access through our enhanced governance package, open banking-ready platform, and leadership in security and privacy practices so our customers can easily deliver digital financial experiences that enable the needs of the consumer to achieve financial wellness. As an independent financial data aggregator with a diverse customer-base composed of financial institutions, wealth management firms, FinTech, and other innovators, Envestnet | Yodlee’s Open Banking Central offers a robust, multi-country pathway so our customers can quickly participate in the open banking ecosystem.

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Member Spotlight: AIR

The Alliance for Innovative Regulation, or AIR, is a nonprofit organization dedicated to bringing financial regulation into the 21st century. What would consumers and small businesses have to gain from this move? According to AIR, improved financial inclusion, better consumer protection, lower rates of financial crime, and continuous innovation that helps them save and earn more and that drives economic expansion.

AIR generates thought leadership, connects and educates innovators and regulators, and runs a policy accelerator to test and demonstrate new regulatory technologies. It also works directly with regulators throughout the world to support government innovation efforts.

Sound financial regulation is particularly important during times of economic distress, like the coronavirus pandemic, when businesses and families are doing more with less and are rapidly shifting to digital channels. AIR CEO Jo Ann Barefoot says, “The pandemic has packed a decade’s worth of innovation and technology adoption into a few short months, in every field including finance and financial regulation. It opens an opportunity for very rapid progress toward regulatory strategies that can work better, cheaper and faster, all at once.”

During the COVID crisis, AIR hosted two Save Small Business Hackathons to accelerate the U.S. Small Business Administration’s Paycheck Protection Program (PPP) loan application process by helping banks calculate, track, and report on requirements for loan forgiveness for the PPP. More recently, AIR ran a techsprint examining how to curtail use of cryptocurrency to purchase child sexual abuse material (CSAM) online. The participating teams of engineers, financial companies, and child advocates will present proposed solutions to FinCEN in December.

CEO Barefoot has explained how improving financial regulation can spur an economic recovery after this crisis. “Regulation may not be sexy, but the rules we create to enforce laws carry a massive economic cost,” Barefoot said In an op-ed in The Hill in May 2020. Barefoot. “Estimates are that federal regulations alone cost $2 trillion annually. Not only is that comparable in cost to the recently passed stimulus bill, but it’s also equivalent to 10 percent of total U.S. GDP.”

AIR Cofounder David Ehrich notes, “Regulation is the aperture through which all financial innovation has to pass. We need to get it right.” As part of that effort, AIR issued a Regtech Manifesto in July, seeking public comment on why and how to modernize the regulatory system. The organization also hosts a podcast, Barefoot Innovation, which explores better solutions for financial consumers at the intersection of technology innovation and regulation with regtech and fintech CEOs, lawmakers, regulators, bankers, and academics.

“A critical trend in financial innovation is the global move toward open finance, grounded in assuring that consumers can use their financial data to advance their own goals and widen their choices, with confidence that it will be secure,” says Barefoot, who was inducted into the CB Insights Fintech Hall of Fame in November. “In the US, 2021 will be pivotal as the CFPB works through how to shape a data landscape that protects consumers and also enables innovation to flourish.”

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FDATA North America Outlines the Negative Consequences of Mandating a 90-Day Reauthentication Requirement

November 17, 2020, Washington, DC – In response to ongoing discussions by large U.S. financial institutions and some policymakers to impose a mandatory 90-day reauthentication requirement for customers wishing to utilize third-party financial tools, the Financial Data and Technology Association (FDATA) of North America today released a paper that outlines the detrimental impact this requirement would have based on the real-world experience of consumers in the European Union and United Kingdom whose access to financial technology tools is hindered by a similar requirement.

FDATA North America provides insight into how a mandatory 90-day reauthentication requirement has had the following impacts in other markets:

  • Resulted in the percent of customers no longer able to access a financial technology tool spiking from 6.6 percent prior to the implementation of the mandate to 44 percent afterwards;
  • Forced a frustrating experience upon the customer that can result in them abandoning use of an otherwise valuable tool as their connection to the tool repeatedly breaks; and
  • Imposed onerous requirements for customers who have accounts with multiple institutions to reauthenticate with each different institution every 90 days to access tools of their choice.

Mandating reauthentication events at least once every 90 days harms customers by aggravating their experience and unnecessarily hindering marketplace competition. The goal of an open finance system is to provide customers with control over their own financial data such that they can choose the products and services that best suit their needs. FDATA North America asserts that full customer control of financial data is the single best way to ensure good stewardship of that data.

Image result for paperclip iconFDATA North America Paper on the Negative Consequences of Mandating a 90-Day Reauthentication Requirement

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Member Spotlight: APImetrics

Headquartered in Seattle, FDATA North America member APImetrics offers the fintech industry’s only intelligent, analytics-driven API performance solution built specifically for the enterprise. By interfacing with all current and legacy API protocols, APImetrics helps companies to know if their APIs are performing as designed. Clients include Microsoft, Philips Signify, leading global banks, and mobile telephone carriers.

Still wondering what an API is? APImetrics has the answer (of course).

According to a company blog post, the term application programming interface (API) was first used in 1968, but meant something a bit different than it does today since in 1968 there was no World Wide Web. Regardless of its evolution, APIs make programming – any kind of programming, according to APImetrics – easier by abstracting out the details of what goes on at both sides of request/response pair. (A request/response pair could be a lot of things, but the easiest way to think about it might be a financial transaction – where there are two sides, both making decisions.)

In today’s world, APIs can tell us a lot about how individuals use everything from social media to e-commerce websites to online banking applications.

And, as APImetrics explained, APIs also can tell us a lot about the spread of viruses like COVID-19. The website covid19api.com, for example, provides an API that allows users easy access to a range of up-to-date data about the virus and how it is traveling.

Even if this information would have been available a century ago during the 1918 influenza outbreak, it would have taken years to assemble. As APImetrics said, “In the past, the required information might have been hidden away in paper documents stored in a filing cabinet somewhere. Whether the information was needed by an organization or someone from outside, getting hold of it was often a slow and unreliable process. Even when information eventually started to be stored electronically, finding it was still often a frustrating and time-consuming experience. But now with the advent of the API, organizations can provide a structured way for users to discover and consume easily, conveniently, and quickly the exact information they need.”

And how would Open Finance improve the data consumers, small businesses, and financial institutions can derive from APIs? CEO David O’Neill responds:

“There are two parts to that. The first is by making sure that the APIs themselves work as documented. There is nothing more frustrating or worse for an eco-system than not being able to get the APIs to actually work in the first place.

“The second is to ensure that they enable that eco-system with consistent, accurate, and fast data that can help create the next generation of financial services. The explosion in open banking isn’t just about making it easier to access services; it’s about creating new services that build on what we have. We have had taxis for over a century, but Uber and Lyft are new. With open banking, the ENTIRE financial service sector benefits when the next ‘Uber of finance’ appears.”

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FDATA North America Statement on the CFPB ANPR on Dodd-Frank 1033

FDATA North America Statement on the CFPB ANPR on Dodd-Frank 1033

Contact: Kerrie Rushton, (202) 365-6338, [email protected]

October 22, Washington, DC – Steve Boms, Executive Director of the Financial Data and Technology Association (FDATA) of North America released the following statement regarding the Consumer Financial Protection Bureau’s advanced notice of proposed rulemaking (ANPR) on Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act:

“This day certainly is a welcome one for consumers and small businesses. Congress gave the CFPB the power a decade ago to ensure Americans have a uniform right to access and use their financial data however they see fit, and today the Bureau is a step closer to asserting that right. If adopted, a rule implementing Section 1033 of the Dodd-Frank Act would be a major building block toward a consumer-centric open finance ecosystem in the United States.

“In any open finance system, consumer protection and security are paramount, which is why every market globally with an open finance framework has a legally binding data right as its centerpiece. We encourage the CFPB to fully utilize its Section 1033 authority to create a consumer financial data right to allow consumers and small businesses to have unrestricted access to technology-based tools that can help them improve their financial wellbeing.”

ABOUT FDATA NORTH AMERICA

FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), API Metrics, Betterment, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fintech Growth Syndicate, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, ValidFi, VoPay, Wealthica, Xero, and others.

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FDATA North America Options for Governance of Customer-Directed Finance in Canada

FDATA North America Options for Governance of Customer-Directed Finance in Canada

Earlier this year, Canada’s Open Banking Advisory Committee submitted recommendations to the Minister of Finance regarding the need for a customer-directed finance regime in Canada. Quite a lot has happened since then – both globally and in the financial technology sector – but the Department of Finance has continued to consider how to deliver customer-directed finance in Canada.

As the department enters the second phase of its consultative process, FDATA North America provided several suggestions that should act as a guide for the deployment of a successful open finance regime, gleaned from experience in other markets.

FDATA North America’s suggested governance models note that the core of any successful framework is a customer data right – and that only government can implement this open finance tenet, and that it is the foundation of every successful customer-directed finance framework globally. The document warns that a customer-directed finance model that defers decisions around data rights to industry results in an ecosystem in which incumbents are further empowered to determine how much control their customers may have over their data – to the detriment of competition, innovation and financial access.

As such, the document proposes governance models with the strong recommendation that industry alone cannot deliver customer-directed finance but can provide technology solutions that meet the policy standards set by government.

Image result for paperclip iconFDATA North America’s suggested governance models

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), API Metrics, Betterment, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fintech Growth Syndicate, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

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