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FDATA North America December Newsletter

FDATA North America Newsletter December 2023

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 NA Statement On Canada’s FES Implementing Consumer-Driven Finance. On November 21, 2023, the Canadian Government released its 2023 Fall Economic Statement, which included a comprehensive framework for consumer-driven finance and open finance directives. The Canadian Government’s implementation plan includes a data portability right for financial institutions and fintechs, a third-party accreditation regime with audits and a public registry, an overseeing government-led entity, a single technical standard deemed fit for purpose, and a liability framework for consumer harm in cases of data misuse or fraudulent account access. FDATA released a statement on the inclusion of consumer-driven finance in the FES, which can be found here.

Member News & Activity

API Metrics announced it launched a free service level agreement (“SLA”) monitoring feature for popular API suppliers like Amazon Web Services, Azure, and Google Cloud, aimed at helping application owners track API performance and automatically request service credits for issues. This new capability allows easy integration and monitoring without coding, providing insights into API quality for both technical and business users.

Basis Theory published a blog post emphasizing the importance of continuously enhancing payment performance for businesses, highlighting strategies such as diversifying Payment Service Providers, employing tokenization for data management, and optimizing transactions through automated processing and specific payment method routing.

Envestnet Yodlee published a blog post detailing the expansion of Australia’s Consumer Data Right (“CDR”) into open finance, emphasizing the inclusion of non-bank lending in the statutory data sharing regime from November 2024. This development highlights significant steps for non-bank lenders to become compliant data holders under new CDR rules.

Experian announced it expanded its digital verification service, Work Report™, by partnering with Datagraphic, enabling employees using Epay to consent to digital payroll information sharing for identity verification. This integration now covers 82% of UK employees, significantly streamlining financial processes like mortgage and car finance applications.

Fiserv published its consumer survey, “Expectations & Experiences: AI and Payments Innovation,” highlighting the increasing role of conversational and generative AI in personal finance management, with consumers using these technologies for various financial insights. The survey revealed the growing opportunities and challenges for AI in banking, emphasizing the need for financial service providers to adapt to evolving consumer preferences.

Flinks announced that the Large Credit Union Coalition (“LCUC”) in Canada has chosen Caspian One as their preferred partner to create a customized Open Banking platform, tailored to the Canadian credit union system.

Intuit announced new e-commerce innovations for QuickBooks Online, designed to aid small businesses in managing their inventory across multiple sales channels from a single platform.

Method posted a blog on how their partnership with Budge enabled the launch of a financial management solution for millennials struggling with personal debt and savings. Budge’s platform, supported by Method’s technology, offers tailored financial advice and seamless integration of users’ debt accounts.

MX was featured in a B FinTec Buzz article announcing their new open finance product innovations, including advanced data-driven insights, budgeting tools, and a mobile banking SDK to enhance financial health and enable customized mobile banking app development.

Plaid was featured in a Alkami Technology press release announcing their partnership to provide financial institutions direct API access to Plaid via the Financial Data Exchange Aligned (“FDX”) API Core Exchange.

Questrade published a press release welcoming the Canadian Government’s Fall Economic Statement, which outlines steps towards establishing Canada’s open finance framework in Budget 2024.

Trustly published a blog outlining five key use cases of Open Banking for merchants. These use cases include providing instant payouts for quick consumer refunds, verifying account information efficiently, enhancing “Know Your Customer” (“KYC”) processes through bank-grade data, preventing payment fraud with secure ACH transactions, and modernizing subscription payments with stable bank account alternatives.

Xero was featured in a Open Banking Expo article for unveiling two new payment features aimed at aiding UK small businesses with cash flow management. These features, including a bill payments tool powered by Open Banking, enable businesses to efficiently handle bills directly within Xero, marking Xero as the first major small business cloud accounting software in the UK to offer such Open Banking-enabled functionalities.

Events and Submission Deadlines

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FDATA North America Statement on Deputy Prime Minister Freeland’s FES Implementing Consumer-Driven Finance Directives

Contact: Laine Williams, (202) 897-4757, [email protected] 

November 21, 2023 Washington, DC – The Financial Data and Technology Association of North America (FDATA), a trade association representing more than 30 financial technology companies and consumer-permissioned data access platforms in Canada and the United States, today applauded the inclusion of consumer-driven finance in the 2023 Fall Economic Statement (FES).  

Steve Boms, Executive Director of FDATA, released the following statement:  

“We are greatly encouraged by Deputy Prime Minister and Finance Minister Freeland’s commitment to advance consumer-driven finance in Canada. The inclusion of consumer-driven finance in the FES marks a significant step for the financial empowerment of consumers and for small and medium-sized enterprises, for fostering a more innovative Canadian financial services marketplace, and for promoting a fairer and more inclusive financial services ecosystem. It reflects a global trend towards consumer-centric financial services, and brings Canada in line with the regimes established by nearly every other G-7 nation.  

We applaud the comprehensive consumer-driven finance framework announced in the FES and look forward to working closely with the Government of Canada as it delivers consumer-driven finance through next year’s budget to benefit all Canadian consumers and businesses.” 

Additionally, we have received supportive comments from our member groups, highlighting the significance of these developments. Tanya Woods, Head of Government and Regulatory Affairs & Policy Counsel at Questrade Financial Group, a member of FDATA, stated

“We welcome today’s announcements on open banking which will give Canadians more power over their financial wellbeing. These are positive developments towards a fulsome and competitive open finance framework which we will continue to advocate for.” 

Faye Pang, Canada Country Manager, Xero, provided the following statement: 

“We are incredibly energized by the language in the FES that supports the progress of open banking and applaud Deputy Prime Minister and Finance Minister Freeland for their support. A fair, fast, and efficient open banking system can not only open up new avenues of capital, but help small business owners focus on what’s important: running their business. Today’s commitments noted in the FES take us one step closer to achieving this vision.” 

 

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FDATA North America November Newsletter

FDATA North America Newsletter November 2023

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 NA Statement On The CFPB Proposed Rule Implementing Section 1033. On October 19, 2023, the Consumer Financial Protection Bureau (“CFPB”) released its long-awaited proposed rule implementing Section 1033 of the Dodd-Frank Act. As anticipated, the Notice of Proposed Rulemaking (“NPRM”) calls for a legal right for consumers to access and share to their data, requires that data providers build dedicated “developer portals” to make data available to consumer-permissioned third parties, promotes competition and innovation, and includes data privacy and security requirements for third parties. FDATA released a statement on the NPRM, which can be found here.

Submission by FDATA NA To the House of Commons Standing Committee on Industry and Technology (INDU) Regarding the Study of Bill C-27. On October 31, 2023 – FDATA NA submitted a written brief to the Canadian House of Commons Standing Committee on Industry and Technology ahead of testifying before the panel, advocating for consumer-permissioned access to financial data in Canada. FDATA NA noted it supports the implementation of an open finance regime in Canada, emphasizing the right of consumers and SMEs to securely share their financial data across providers. FDATA NA praised recent U.S. advancements in open finance regulation and urged Canada to follow suit, highlighting the importance of Bill C-27 for data portability and privacy. Click here to read the brief and click here to watch the hearing.

Member News & Activity

API Metrics released a blog post entitled “Navigating The CFPB’s Latest Rulemaking On Personal Financial Data Rights: Lessons From Open Banking And Beyond,” focusing on the Consumer Financial Protection Bureau’s (CFPB) new draft rules on Personal Financial Data Rights.

Basis Theory published a blog post highlighting its pivotal role in empowering businesses across various industries to offer branded debit and credit cards to their customers. The blog noted that the platform does more than just issue cards; it assumes responsibility for numerous security elements, including KYC, and extends additional services like funding, transaction monitoring, and reporting.

Envestnet Yodlee introduced Credit Accelerator, a new technology solution that uses alternative data to enhance credit access, particularly for those with limited or no traditional credit history. The press release noted that this innovation aligns with the CFPB’s proposed open banking rule, enabling more inclusive credit decisions.

Experian announced a partnership with what3words, integrating their unique location system into Experian’s address validation solution. This enhancement allows businesses to provide more accurate delivery locations, particularly beneficial in hard-to-find areas.

Fiserv announced that it enhanced its financial technology offerings by streamlining access to its core banking APIs, enabling immediate, self-service access for developers. This development, part of the Banking Hub within Fiserv’s Developer Studio, aims to accelerate innovation in the financial industry.

Intuit announced that it expanded its financial offerings with QuickBooks Bill Pay, designed to enhance bill payment and accounts payable automation for businesses. This new feature within QuickBooks streamlines bill management, offering automated bill creation from vendor invoices, digital record-keeping, and various payment options.

Method published a blog announcing its strategic partnership with Plannery, focusing on alleviating the financial burdens of healthcare professionals. This collaboration introduces a bespoke financial wellness platform, specifically designed to address the unique debt challenges faced by healthcare workers.

MX announced that the Financial Technology Report named MX as one of The Top 100 Financial Technology Companies of 2023.

Plaid was featured in a PYMNTS article highlighting “consumer-centric” innovation in empowering money movement.

Questrade announced that MoneySense recognized Questrade as the Best Low-Fee Robo Advisor is Canada. Robo-advisors, like Questrade’s Questwealth Portfolios, use financial technology to make investment management more affordable and accessible.

Trustly published a blog summarizing how open banking transforms the consumer onboarding process by simplifying account verification. Trustly’s solution, Trustly Connect, leverages this technology to offer real-time, secure account information retrieval, streamlining the onboarding process, reducing fraud, and enhancing customer experience.

Xero announced its newest artificial intelligence (AI) feature that it said would enhance user experience by providing quick and efficient responses to queries asked in Xero Central. In addition to direct answers, the AI also supplies a list of other relevant content, significantly speeding up the process of accessing needed information.

Events and Submission Deadlines

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Submission by FDATA North America To the House of Commons Standing Committee on Industry and Technology (INDU) Regarding the Study of Bill C-27

October 31, 2023 – The Financial Data and Technology Association of North America (“FDATA North America”) is the leading trade association advocating for consumer-permissioned access to financial data in both Canada and the United States. Our members include firms with a variety of different business models that collectively provide more than six million Canadian consumers and small- and medium-enterprises (“SMEs”) with access to vital financial services and products. Utilizing the products, services, and tools, that FDATA North America’s members provide, Canadian consumers can, for example, access more competitive banking services, including more affordable credit, utilize more efficient payment options, and benefit from technology to better manage their finances and grow their wealth. Canadian small businesses across the country depend on FDATA North America member companies to manage their accounting and credit needs and more easily send and receive payments.

FDATA North America was founded in early 2018 by several financial technology firms whose technology-based products and services allow consumers and SMEs to improve their financial wellbeing. Regardless of their business model, each FDATA North America member’s product or service shares one fundamental and foundational requisite: the ability of a consumer or SME to actively permission access to some component of their own financial data that is held by financial services providers.

We are strong advocates of Canada’s implementation of an open finance regime, which was first outlined as a government priority in Budget 2018. The core idea of open finance is this: a Canadian consumer or SME should be able to safely and securely share access to their data held at one provider with another provider that offers a better financial product, service, or tool. Whether it’s a chequing, savings, business, brokerage, pension, mortgage, or auto loan account, or data held by a payroll or benefits provider, open finance is the straightforward notion that the customer should have the right to use that data for their own benefit. Once built, open finance in Canada will put consumers and SMEs in full control of their financial data, facilitating a more transparent and competitive Canadian financial services marketplace that provides safe and secure data portability. FDATA North America views the data portability right and data privacy framework included in Bill C-27 as fundamental cornerstones of this modernized approach to financial services.

Following the pandemic, a period of economic uncertainty and rising inflation, one thing is obvious: Consumers and entrepreneurs are demanding access to financial solutions in new and novel ways that better meet their needs. Digital financial services, typically offered by non-bank financial technology (“fintech”) companies can help meet those needs. In a 2022 survey of consumers in the U.S. and U.K., two-thirds said fintech helped them weather economic challenges.
Half of respondents said fintech helped them feel more in control of their finances. And nine in ten users saw benefits from using fintech tools.

A survey of Canadians commissioned last year by FDATA North America and Fintechs Canada found similar results. That data showed that half of Canadians feel stress with interacting with Canada’s existing financial services sector and that more than two-third of Canadians believe more competition in the financial services marketplace would lead to a greater choice in products and lower financial services fees. Ninety percent of Canadians indicated they found fintech products easy to use, with more than eighty percent reporting they paid lower fees to fintechs than to their
banks for similar services or products.

Open finance results in more choices and better experiences for consumers and SMEs, as banks and nonbanks compete aggressively to win over customers. Canadians deserve access to these alternatives, just like their neighbors in the U.S. and U.K.

As the committee has heard from other witnesses, Canada lags significantly behind virtually every other G-20 country with regard to open finance, data portability, and data privacy. The United Kingdom, Australia, New Zealand, Singapore, Japan, Brazil, the European Union and other jurisdictions have all enacted some version of government-led open finance under which consumers and SMEs have legally binding data access rights and data privacy protections afforded to them to access a more competitive and vibrant financial services marketplace.

In contrast, today, Canadian consumers and SMEs have no legal right to access or share access to their financial data. Unlike the overwhelming majority of other developed countries, in Canada, a consumer’s or SME’s bank is empowered to determine whether their customer may share elements of their data with a third-party provider of financial services to get a better deal, access a new product or tool, or avoid paying exorbitant fees. And, to the extent that a bank does allow its customers to share access to their financial data, there are generally onerous and, in some cases, restrictive terms dictating the limitations under which customers are able to do so.

While Canada has taken important steps towards a more open, consumer-directed finance (CDF) regime, significant work remains to reach implementation. Abraham Tachjian was appointed as Canada’s open finance lead in March 2022, and FDATA North America commends him for establishing working groups for some of the most crucial issues associated with the introduction of open finance in Canada.

Unfortunately, the efforts of these working groups have yet to come to fruition, as concrete progress towards implementation of open banking has stalled. The 18-month timeline the government had established is now out of reach, which should be a concern to Canadian policymakers, consumers and SMEs alike.

Earlier this month, the United States formally launched its own open finance regulatory regime with a Consumer Financial Protection Bureau (“CFPB”) rulemaking. Recognizing that incumbents in the financial services market would not on their own deliver a more competitive, customer-centric ecosystem for U.S. consumers and SMEs, the Director of the CFPB noted in announcing the U.S. rules that the CFPB’s open finance rule will “supercharge competition, improve financial products and services, and discourage junk fees.” Like Bill C-27, the CFPB rule would provide data portability rights to consumers and would require those firms that access, with their express consent, end users’ data to abide by strict data privacy and security provisions.

To advance its open finance regulations, the CFPB had an advantage in the United States that the Departments of Finance (“Finance Canada”) and Innovation, Science, and Economic Development (“ISED”) currently do not: strong statutory authority to do so. Finance Canada has been studying how to deliver open finance in Canada for the better part of five years. FDATA North America views enactment of Bill C-27 as a critical element of a transition from open finance ideation to implementation. Once consumer and SME data portability have been enshrined in law, ISED and
Finance Canada will have the statutory tools required to finally deliver open finance in Canada.

Consumers and SMEs in Canada are being left behind as the rest of the G-20 build and deploy open finance frameworks that facilitate competition, enable greater access to and inclusion within the financial services marketplace, and provide their citizens with appropriate data protections when utilizing a legally binding data portability right. The data portability and data privacy provisions included in Bill C-27 represent integrally important statutory tools that ISED and Finance Canada will need to help Canada catch up – and to foster a safer and more competitive
financial services sector for all Canadians.

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FDATA North America Statement On The CFPB Proposed Rule Implementing Section 1033

October 19, 2023, Washington, DC – The Financial Data and Technology Association of North America (FDATA), a trade association representing three dozen financial technology and open finance companies, today celebrated the release of the Consumer Financial Protection Bureau’s proposed rule implementing Section 1033 of the Dodd-Frank Act.

Steve Boms, Executive Director of FDATA, released the following statement:

“Today, we’re celebrating a moment that our members – and millions of consumers across the country – have been waiting for: the CFPB’s release of its proposed rule creating a legally binding consumer financial data right. We strongly support the proposed rule, which will put consumers in full control of their financial data and empower them to choose the financial provider best suited to meet their unique needs. The proposed rule will create more competition and choice in the financial services marketplace, ultimately leading to better consumer outcomes.

We are also pleased that the proposed rule creates strong data security and privacy standards to ensure that consumers are protected wherever they choose to manage their finances.

The long-awaited rulemaking commenced with the issuance of the CFPB’s Request for Information regarding Section 1033 of the Dodd-Frank Act in 2016. While the need for this rule was clear then, with hundreds of millions of consumers now relying on digital financial tools, it is imperative today. We look forward to working with the CFPB as it seeks to finalize this rule next year and bring U.S. consumer financial data rights on par with many other nations across the globe.”

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Coalition of leading industry stakeholders voice continued support for vital Canadian Payments Act amendments

OTTAWA, October 11, 2023 — The Fall Economic Statement presents an opportunity to modernize the Canadian Payments Act to strengthen financial competition, innovation, consumer protection and economic stability.

Leaders across Canada’s payment industry continue to demonstrate unified support for amendments to the Canadian Payments Act to expand Payments Canada’s membership. This support was previously expressed through various pre-budget consultation submissions, a joint letter to the Minister of Finance and a 2018 Department of Finance consultation.

Expanded membership eligibility is essential to broaden safe access and participation on Payments Canada’s infrastructure. By broadening access to include payment service providers, credit union locals, and operators of financial market infrastructures that meet regulatory and legislative requirements, the Government of Canada will foster competition and innovation and help ensure the future of digital payments happens within — and not outside — the regulatory system.

“Payments are changing at an unprecedented rate,” said Tracey Black, President and Chief Executive Officer of Payments Canada. “Canada must evolve its payment systems and supporting legislation in parallel to deliver continued financial stability, to support increased competition and innovation and to ensure Canada remains globally competitive.”

“Payments Canada, and the regulatory framework that underpins the organization, has a long, proven history of serving Canadians’ best interests by getting money to where it needs to be, safely,” said Garry Foster, Chair of the Board of Directors of Payments Canada. “But the world is changing. Payments are changing. And innovation is happening no matter what. If we want to continue to serve Canadians in a way that reflects the level of safety and security expected from Canada’s financial system, we need to modernize the Canadian Payments Act.”

Currently, Payments Canada membership is limited to banks, credit union centrals, and select other financial institution types, including securities dealers. Membership is required to access Payments Canada’s infrastructure as a participant. Proposed changes to the Canadian Payments Act would expand membership eligibility to include payment service providers registered with the Bank of Canada, provincially regulated credit unions, and operators of financial market infrastructures designated by the Bank of Canada. To gain access to the payment systems, a Payments Canada member must meet the risk-based access and participation requirements set out in Payments Canada’s by-laws, rules and standards.

Contributed quotes

“As new technology and services continue to transform the way payments are made and processed, amending and broadening access to the Canadian Payments Act can help modernize Canada’s payment landscape. Allowing for a more diverse group of financial service providers can ensure the path is open for innovation and encourage the development of new user-friendly, accessible and cost-efficient payment solutions for small businesses. It can also foster competition within the industry, which can drive costs down and improve financial services.”
Dan Kelly, President and Chief Executive Officer
Canadian Federation of Independent Business (CFIB)

“The most important benefits we can offer Canadian consumers are greater choice and competition within the context of a safe and well-regulated payment system. A measured approach to broadening access to Payments Canada membership, which includes effective rules and robust consumer protection, can help to create a more innovative and competitive marketplace that is good for everyone.”
Elizabeth Mulholland
Prosper Canada

“Canada has a strong record of payment innovation. At the same time, we know we must continue to update policy and regulatory frameworks to ensure they meet the needs of Canadians and support growth and competitiveness in the market. Interac supports updating the Canadian Payments Act to enable broadened participation in national payments infrastructure and will continue to work with industry stakeholders to advance opportunities for increased access on our network and products.”
Kirkland Morris, VP Enterprise Initiatives & External Affairs
Interac

“Making the financial sector work harder for its customers is a necessary part of solving Canada’s affordability crisis. Expanding access to payment systems would promote responsible competition in the financial sector, letting Canadian consumers and businesses keep more of their hard-earned money in their pockets.”
Alex Vronces, Executive Director
Fintechs Canada

“Expanding membership to Payments Canada will allow fintechs to serve on the front lines of bringing the benefits of faster payments to consumers, merchants and the economy.”
Scott Talbott, SVP, Government Affairs
Electronic Transactions Association (ETA)  

“The payment fintech industry in Canada has made commendable strides in introducing new and innovative concepts. However, there are still some elements hindering the overall progress of the sector. The lack of representation and access to these fintechs in Payments Canada’s membership is presenting certain obstacles in the discussions surrounding crucial policies and infrastructure. To overcome these hurdles, we firmly believe that expanding membership criteria is necessary. This will enable innovative fintechs to offer Canadians superior products and services, foster healthy competition, and promote innovation. Ultimately, this will help Canada remain competitive in the global fintech landscape. At Fintech Cadence, we wholeheartedly support the idea of extending membership eligibility to Payment Canada’s membership.”
Layial El-Hadi, Executive Director
Fintech Cadence

“Canada must act now to modernize payments. The amendments to the Canadian Payments Act are long overdue and necessary to enable non-bank access to the payment system. Allowing a broader group of financial service providers like Wise to become members of Payments Canada will lower payment costs while increasing speed, competition, innovation, and consumer adoption. Payment modernization will allow Canada to go from a global fintech laggard to a leader.”
Nick Catino, Global Head of Policy & Social Impact
Wise

“It is evident that the most significant innovations in payment services within Canada have been pioneered by organizations that, unfortunately, do not qualify for membership within Payments Canada. This exclusion has placed payment service providers (PSPs), such as Telpay, and their valued customers, in a highly disadvantageous position. The inability to participate in the Payments Canada network has stifled competition and hindered progress within our industry. This has resulted in a glaring disparity in access to essential payment infrastructure, directly impacting the ability of PSPs  to offer reliable and flexible solutions to their clients. We firmly believe that broadening access to these systems is not only a matter of fairness but also of economic necessity. It is our assertion that providing greater access will not only empower PSPs but also benefit end-users — both payors and payees. A more inclusive approach to payment systems will foster innovation, enhance competition, and drive the demand for more reliable and flexible payment solutions.”
John Zajic, Vice President, Corporate Policy & Compliance
Telpay

“Implementation of open banking and amendments to the Canadian Payments Act that allow a broader set of stakeholders to safely and securely gain access to Canada’s payment systems will facilitate a consumer-centric 21st century financial services marketplace. The Fall Economic Statement provides a unique opportunity to meaningfully advance both of these important initiatives and to promote innovation, competition, and a more inclusive Canadian financial services system.”
Steve Boms, Executive Director
Financial Data and Technology Association of North America

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FDATA North America October Newsletter

FDATA North America Monthly Newsletter for October 2023

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.

Member News & Activity

API Metrics released a blog post last week entitled “Unlocking The Unmet Potential Of Open Banking” where they discussed the ways in which open banking has yet to meet its capabilities in multiple markets and outlined recent statistics in the UK compared to geographical variations in open banking. The blog advocates for the market’s need to ensure customer trust and reliability in building an open banking infrastructure and how API Metrics continues to do so for their customers.

Basis Theory published a blog post regarding their partnership with Method Financial. In this customer story, they highlight Method’s mission to assist fintech developers integrate key functionalities like real-time financial data, repayment, balance transfers, and bill pay automation into their apps. In Basis theory, Method found a partner that could move as quickly as they moved, and ever since they have been satisfied with the ease of integration and the level of support from Basis Theory.

Codat released a study, discussed in detail in a piece in The Fintech Times, of 115 business lenders in the US and UK found that digital lenders are also seeing a rise in default rates (41 per cent), and, as a result, are tightening lending standards to manage risk. Despite economic difficulties, Codat also reveals that, “business lenders continue to innovate and evolve their offerings. Providers are adapting their strategies and priorities to narrow in focus on operational efficiency, retaining current customers and launching new lending products.”

Experian was named a market leader in fraud prevention by Liminal’s Link Index Report for Account Opening in Financial Services. The report recognizes Experian for leadership in compliance and fraud prevention capabilities. Experian’s identity verification and fraud prevention solutions received the highest Link Score out of the 32 companies highlighted in the report. It found that Experian was recognized by 94% of buyers and 89% identified Experian as a market leader.

Fiserv was named to TIME World’s Best Companies 2023 for leading global providers of payments and financial technology solutions. Fiserv was awarded this honor based on three primary dimensions: employee satisfaction, revenue growth, and sustainability.

Flinks published a article last month entitled, “Open Banking in Action – A Look at Use Cases,” where they discuss data-in use cases and data-out use cases and how how these two different types of open banking options can be put to work right away. Flinks dives into the most relevant open banking use cases for financial institutions and how FIs can upgrade their digital experiences to maximize conversions and gain a competitive advantage.

Intuit was ranked by Fortune Magazine as #5 on their 2023 Best Workplaces in Technology list. This award follows their recent launch of Intuit Assist, which reinforces their goal to cultivate a strong culture of tech innovation to solve their customers’ most important problems.

Method posted a recent blog post highlighting how the Peach app, powered by Method’s Liability APIs, delivers clear insights into debts and devises personalized repayment strategies for a debt-free future. By partnering with Method, Peach has connected more than 55k accounts, delivering a transparent view into debt management and providing step-by-step repayment strategies to help users become debt-free.

MX held their Money Experience Summit from September 19-21, which is the premier gathering of finance and fintech leaders, influencers, builders, and connectors. Stay in the loop for insightful discussions, unique networking opportunities, and one-of-a-kind experiences.

Plaid announced last month that it will be participating in FinRegLab and the Department of Commerce’s new pilot program through the Minority Business Development Agency (MBDA), which studies how cash flow data can improve credit access for minority-owned companies and underserved small businesses. Plaid will provide free account connectivity services to participating mission-based lenders to allow loan applicants to authorize their account data to be accessed for underwriting.

Portabl published a recent blog entitled, “What is consumer-permissioned data & how does it work?” The blog outlines that while banks and aggregators have done an impressive job shaping conventions and standards around consumer-permissioned data, Portabl offers the market the ability to bridge the gap between simpler account access and secure data sharing.

TransUnion published a recent blog titled, “Point-of-Sale Installment Loans and Your Credit,” where they show BNPL and POS installment loans can be appealing because a large purchase doesn’t have to be paid in full upfront. POS loas have been used by as many as 100 million Americans at least once in the past year, according to 2022 TransUnion Consumer Pulse research.

Trustly penned a new post for their blog entitled: “Maximizing Value Through Grocery Payments: How Open Banking Can Help,” which outlines the ways in which open banking can help grocery store merchants improve shopper experience, lower payment acceptance costs, and maximize value through payments during these more challenging economic times.

Events and Submission Deadlines

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FDATA North America Responds to CFPB Data Broker SBREFA Memo

September 21, 2023, Washington, DC – Steve Boms, the Executive Director of the Financial Data and Technology Association of North America, a consortium of financial technology companies united behind the notion that consumers and small businesses should have full control over their financial data, today released the following statement in response to the Consumer Financial Protection Bureau’s (CFPB) outline of proposals and alternatives under consideration by the agency ahead of its “data broker” rulemaking:

 “We welcome the CFPB’s close scrutiny of companies that collect and sell consumers’ data, often unbeknownst to the consumer, and use that data for marketing and advertising purposes.

At the same time, we are concerned that the CFPB did not distinguish in this outline between entities that collect consumer information without consumers’ informed consent and third-party providers of financial products and tools that access consumers’ data at their express direction and consistent with the CFPB’s forthcoming Section 1033 Open Banking rule. 

Entities that enable consumers to access and share their own personal financial information – at consumers’ express direction – are at the heart of open banking and empower consumer choice and control, and improve consumers’ ability to manage their financial lives. These companies should be appropriately regulated under Section 1033, including adhering to the privacy principles FDATA North America members released in March of this year.

The same principles that led to the enactment of the Fair Credit Reporting Act in 1970 – transparency and control for consumers over their financial data – are the hallmarks of customer-permissioned data access marketplace today. Accordingly, as it contemplates a proposed rule in this space, we encourage the CFPB in the strongest possible terms to distinguish between “data brokers” and third-party financial providers that access consumer data based on a consumer’s affirmative request to do so.”

FDATA North America previously responded to the CFPB’s Request for Information (RFI) Regarding Data Brokers and Other Business Practices Involving the Collection and Sale of Consumer Information, submitting a comment letter in June stressing in the strongest possible terms, that third-party providers of financial services that rely on consumer-permissioned data are not data brokers, and therefore should be exempt from any Bureau rulemakings, guidance, or other actions it may consider in the data brokerage space.

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FDATA North America September Newsletter

FDATA News

FDATA North America Submits Comments to Canada’s Standing Committee on Finance (FINA) Pre-2024 Budget Consultations. Our submission stressed that Canada needs to remain diligent in its pursuit of an open banking framework, that is must recognize that other countries are rapidly implementing their own open banking regimes, and remain keenly aware that every day that passes without open banking development risks leaving Canadians further behind their international counterparts and competitors. Our letter also expressed disappointment with the lack of progress on the open banking file, and called on the government to include language in Budget 2024 to rapidly implement the recommendations that Open Banking Lead Abraham Tachjian will provide in his forthcoming final report. Our submission also called for the government to outline its approach to open finance, the next logical step after open banking, and amend the Canadian Payments Act to enable Payments Canada to expand its membership to include federally regulated payment service providers, providing access to its forthcoming real-time payment system.

Member News & Activity

APImetrics published a new blog post entitled: “Why You Need to Think of APIs as Products” which demonstrates how a product-centric approach to API development means implementing security and privacy aspects right from the design phase through well after deployment.

Codat published a new blog post entitled: “Why big banks are finally making moves in business banking” which explained how small business borrowers can increase their access to credit by connecting and permissioning their deposit account data to SMB lenders.

Envestnet Data and Analytics hosted a webinar entitled” Open Banking Around the World” which outlined the evolution of open banking and open finance in several countries across the globe. It also featured discussion of the different paths countries have taken toward open banking accreditation, and described the use cases – like lending, payment initiation, personal finance, and more – that have been successful in each region.

Fiserv was recently recognized by CNBC in the Digital Payments Category of its “World Top Fintech Companies” list for the depth and breadth of capabilities it provides merchants and financial institutions, including solutions that enable digital commerce, digital money transfers, and mobile payments.

GoCardless has announced it is renewing its strategic partnership with fellow FDATA North America member Xero, the global small business platform, for another five years. The agreement builds on a long-term relationship which started in 2016, focused on helping small businesses get paid faster. For GoCardless this also represents a doubling down in the accountancy space, a key sector for the fintech as it executes on its ambitious growth plans.

Method was named a finalist in the PayTech Start-up of the Year category at the PayTech Awards USA 2023. Additionally, their founding software engineer Mustafa Ali spoke at Fintech Devcon on the importance of idempotency in building resilient, dependable APIs, and why adopting an idempotent-first mindset is vital for API-first companies.

MX published a new blog post and whitepaper entitled: “How Open Finance Improves Security,” which explain how consumer-permissioned data access leads to more consumer control and awareness of their financial data, as well as allowing for modern data security methods, particularly account access without the use of usernames and passwords.

Plaid’s Global Head of Policy John Pitts joined the “Breaking Banks” show along with Jonah Crane, partner at Klaros Group, and Dara Tarkowsi, partner at Actuate Law, to discuss open finance, the recent Interagency Guidance on Third Party Due Diligence from U.S. regulators, and how fintechs that are third-party bank partners must understand the importance of this guidance and prepare themselves for more interaction with regulators in the future.

Trustly’s Director of Regulatory and Public Affairs, Matt Janiga, joined Harold Levey at Pymnts to discuss the CFPB ‘s proposed rules and standards coming in October and the landscape of Open Banking regulation in the US. Matt put this latest regulatory work in context by explaining how laws designed to protect consumer information have been on the books for decades, and how the spirit of those laws is tied to a basic principle: If companies are sharing your data — whether it’s with another company or even the government — you should have some right to know about it and also to know what information the company has about you.

Vaultree’s CEO and founder Hamed Arbabi penned an article for the Forbes Technology Council entitled: “How To Better Support Gig Workers Through Payment Modernization,” which how payment modernization, particularly on payroll systems, is critical for providing gig workers the financial services needed to meet their work circumstances.

Events and Submission Deadlines

by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Standing Committee on Finance Pre-2024 Budget Consultations

August 3, 2023, Washington, DC – The Financial Data and Technology Association (FDATA) of North America submitted comments to Canada’s Standing Committee on Finance (FINA) as part of its pre-budget consultations in advance of the 2024 budget. Our submission stressed that Canada needs to remain diligent in its pursuit of an open banking framework which will provide Canadians much needed relief in banking fees and other expenses, that Canada must recognize that other countries are rapidly implementing their own open banking regimes, and remain keenly aware that every day that passes without open banking development risks leaving Canadians further behind their international counterparts and competitors.

Our letter also expressed disappointment with the lack of progress on the open banking file, and called on the government to:

  • Include language in Budget 2024 to implement the recommendations that Open Banking Lead Abraham Tachjian will provide in his forthcoming final report and rapidly implement Canada’s open banking system, including funding for the development of a neutral, transparent, and nimble governance function;
  • Include language in Budget 2024 outlining the government’s approach to open finance, the next logical step after open banking, and the framework needed to truly unlock market innovation and competition to benefit Canadian consumers and businesses; and
  • Amend the Canadian Payments Act to enable Payments Canada to expand its membership to include federally regulated payment service providers, providing access to its forthcoming real-time payment system.

In the submission, we also asserted that any open banking governance entity in Canada must be neutral (i.e. not controlled by any particular stakeholder(s) with commercial interests in the ecosystem), transparent (i.e. it invites and considers stakeholder input and subjects its decisions to an open, publicly visible process), and nimble (i.e. capable of making binding decisions relatively quickly and without undue bureaucracy), with all stakeholders in the open banking system agreeing to comply with the decisions and determinations made by the open banking governance entity as a condition of being active in the market.

A full copy of the submission is available here.

 

 

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