North America – Members Spotlight

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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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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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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: DirectID

 

Most consumers are aware that their financial institution holds all kind of information about them that is used to determine everything from interest rates to credit-worthiness.

But how could this data be used by small enterprises, and consumers themselves, for consumers’ own benefit? That was the question DirectID CEO James Varga asked about a decade ago. “I wanted to give consumers the ability to do more online, by taking the trusted data that they had in their bank account and using it to access additional services,” said Varga.

Since 2011, DirectID’s mission has been to enable businesses across the globe to effortlessly use bank data to grow their business, revolutionize their offerings, and, most importantly, better understand customers in order to improve the consumer experience. Specifically, DirectID builds products using bank data, which helps firms onboard their customers quickly, gain a fuller understanding of them, and make more informed decisions, faster. This insight also lowers operational costs for small enterprises.

For example, DirectID customer JustUs, a cutting edge peer-to-peer lending platform that helps credit-challenged consumers find responsible and affordable capital, has used DirectID’s platform to move away from traditional background credit checks. After partnering with DirectID, JustUs can now connect to an applicant’s online bank account – with their approval – to verify identity and review live bank statement transactions in just a few seconds. That means a faster decision time for in-need applicants and a higher certainty of repayment for lenders.

Security is one of DirectID’s chief concerns. Its security model is bank level, layered and protected by tokenized oAuth authentication and strong encryption. All transaction data is encrypted and access to customers’ bank information is read only.

The global move toward open banking already has enhanced DirectID’s ability to serve small businesses and consumer. Today DirectID operates in more than 50 countries with more than 13,000 banking connections.

And how does Open Banking help the very consumers Varga was thinking about 10 years ago? In a recent company blog post, DirectID said, “Open Banking has significant advantages in security, speed and convenience over existing technologies, and can be adapted for any sector including local businesses.”

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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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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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Member Spotlight: Trustly

 

Today, our salaries are deposited straight into our bank accounts and we shop online, from merchants all around the world. So why is it so hard to pay straight from our bank accounts? This is where Trustly comes in.

The fintech, which now has operations in Canada and Australia in addition to the United States and Europe, is building an Online Banking Payments network that bypasses the card networks, letting consumers make and receive simple and safe payments to/from merchants by signing in to their online banking. With support for more than 7,600 banks, Trustly enables merchants to accept payments from roughly 600 million consumers across Europe and North America.

Trustly serves many of the world’s most prominent merchants within e-commerce, financial services, gaming, media, telecom and travel, which all benefit from increased consumer conversion and reduced operational, fraud and chargeback costs.

In the United States, for instance, Trustly partners with AT&T to help subscribers pay their monthly bills, and with Dell to help customers purchase computers online, in both cases with a simple and safe user experience — no card or registration needed. At the same, AT&T and Dell increase their payment approval rates while reducing their payment acceptance costs and eliminating chargebacks. These are just two examples of how Trustly is helping large North American merchants circumvent the limitations of the card networks.

In Europe, Trustly helps PayPal users top up their wallets, and Norwegian Air travelers pay for plane tickets directly from their bank accounts. And, last year, Trustly established a partnership with the Help to Help Foundation, which grants scholarships to university students in East Africa. Using Trustly’s Direct Debit service to digitize recurring payments and simplify the management of donations from monthly donors, Help to Help has reduced churn, allowing a greater portion of donations to go toward scholarships. Help to Help founder Malin Cronqvist said the organization now saves two to three percent of donations in fees.

Trustly joined FDATA North America to bring more opportunities like these to more consumers in the United States and Canada. “We look forward to helping U.S.and Canadian consumers pay their favorite merchants and billers with our Online Banking Payments service, a modern, simple and safe alternative to cards,” said Alex Gonthier, CEO of Trustly Inc.

The company now has more than 400 employees, 10 offices across the Americas and Europe, and processed more than 100 million payments last year.

In February 2020, Trustly was recognized as Best Payment Initiation Service Provider(PISP)/Account Information Service Provider (AISP) at the Merchant Payment Ecosystem Awards, which honor the achievements of companies in the European merchant payments ecosystem. The PISP AISP award goes to the company “that most efficiently brings open banking services to the merchant community, and provides the best customer experience.”

Leon Dhaene, Chairman of the MPE Awards, explained why Trustly was chosen. “Make e-commerce simple again. It could have been the slogan of a politician, but it is essential if you want to bring potential customers to effectively buy over the internet,” said Dhaene. “The Jury appreciated the fact that Trustly delivers fast, simple, and secure payments in only three steps.”

Simplicity and security – just what consumers can expect with Open Banking in North America.

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Member Spotlight: EQ Bank

EQ Bank is the digital banking platform offered by Equitable Bank, Canada’s Challenger Bank™. Equitable employs more than 900 Canadians and is now the country’s ninth largest independent Schedule I bank. Launched in 2016, EQ Bank provides state-of-the-art digital banking services, including the Savings Plus Account which reimagines banking by offering an everyday high interest rate, plus the flexibility of a checking account, with free transactions, no everyday banking fees, no minimum balances, fast, cheap, and fully transparent international money transfers, and more—all from one account.

CEO and President Andrew Moor has said, “Making smart, future-ready decisions to better the way Canadians bank has always been our primary focus. Cloud-based banking is just one way we’re challenging the status quo in order to bring smarter money solutions to our customers.”

EQ Bank also is challenging the status quo by using various social platforms, including its own blog, to educate its customers and the broader Canadian public about everything from how interest is taxed on a joint account to strategies for increasing personal savings to buying a home.

The blog provides practical, easy-to-digest tips like explaining why consumers are better off when they can link their accounts – a process that would be made much easier with the implementation of an open banking regime in Canada. In a November 2019 blog post, EQ Bank explained, “Linking your account not only streamlines the application process, but it’s the easiest way to start adding funds to your account. When you sign in to your new account for the first time, you’ll already be linked to another bank account; this means you can transfer money and start earning high interest on that amount immediately.”

The bank has regularly spoken about its commitment to bringing open banking to Canada in order to drive innovation and to serve the changing needs of its customers. Equitable CIO Dan Dickinson was the first bank representative to address the Standing Senate Committee on Banking, Trade and Commerce on the topic of Open Banking. Equitable Bank is pushing for Open Banking so that Canadians at all banks can have better options and an improved customer experience.

In September 2020, EQ Bank announced that it had reached more than $4 billion in deposits. (The company has more than 150,000 customers.) In the first three months of the coronavirus pandemic, sign-ups for new accounts tripled. “The need for fair, well-valued banking products and a complete understanding of one’s financial picture has never been more important,” according to Dickinson.

EQ Bank has received multiple awards for its efforts to provide outstanding service and innovative solutions to Canadians. It recently was awarded the Celent Model Bank Awards, which recognizes financial institutions as “model banks” for their outstanding technology initiatives that demonstrate clear business benefits, innovation, and technology or implementation excellence. The company also received one of Ratehub.ca’s inaugural Personal Finance Awards. Rathhub recognized the EQ Bank Savings Plus Account as one of the country’s top high-interest savings accounts.

EQ Bank joined FDATA North America in 2020. As EQ Bank President Moor has said, “Open banking will transform and modernize our industry enormously, benefitting consumers, businesses, and the economy alike. Innovation is in EQ Bank’s DNA, and our recent move to the cloud means we’re not only ready for the future of banking in Canada, we’re driving it.”

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Member Spotlight: Flinks

 

Founded in 2016, Flinks is a Montreal-based company that empowers businesses to provide better financial services to consumers and small businesses. Data security and privacy are among the company’s very top priorities.

By virtue of its information security program, Flinks invests heavily in state-of-the-art security measures and approaches its operations with a “privacy by design” mindset. These measures make the Flinks environment extremely robust from a data protection standpoint. And while Canada waits for open banking to specifically regulate the sharing of financial data, Flinks operates under and is compliant with the relevant applicable privacy laws, including PIPEDA, Canada’s federal privacy and data protection law.

All of the data handled by Flinks is collected, used and shared per the consumer’s direction, following consent protocols that are explicit and easy to understand. Consumers also have the opportunity to request Flinks to correct, update, or erase their personal information in the company’s records. In short, they are in complete control and can withdraw their consent from Flinks to share their data at any time.

Flinks CEO Yves-Gabriel Leboeuf says implementing an open banking framework in Canada will make it even easier to secure consumers’ information and ensure their privacy. As Flinks’ Data Protection Officer Francis Lepine said in this blog post, open banking really is the modernization of existing banking policies. “Sharing bank and financial information has been a common thing to ask consumers for years. All sorts of institutions and businesses rely on void checks, bank statements and tax returns to operate and deliver services,” said Lepine. “Too often, such sensitive information is shared through email — and we’ve heard of even less secure means of communication being used.”

Flinks is enabling a financial system that benefits underserved populations, for example in the area of access to credit. While the traditional credit scoring systems work well for financially active and well-off consumers, they can inhibit companies and individuals that are just getting started, or trying to recover from financial hardship. Credit reports also are slow to capture sudden changes in a person’s financial situation; underwriting models based on financial data can allow for a more real-time, granular picture.

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Member Spotlight: Fintech Growth Syndicate

 

Since its founding in 2016, Canada’s Fintech Growth Syndicate (FGS) has won multiple awards and helped companies transform through corporate innovation. FGS is a trusted innovation firm for large international and Canadian corporations, visionary startups, multi-stakeholder organizations, academic institutions, and governments.

FGS’s deep fintech and financial services expertise sets it apart from other advisory firms. With a mission to revolutionize Canada’s fintech ecosystem until it becomes the best on the planet, FGS launched Maple by FGS – Canada’s most exhaustive fintech ecosystem platform.
FGS tracks and analyzes over 1,200 fintechs in Canada and uses data to help companies quickly explore customer needs and untapped business models.

FGS is actively engaged in the fintech ecosystem, staying up to date with regulatory changes, Open Banking initiatives, payment modernization updates, and more to advise and represent stakeholders’ needs in the financial industry. Along with being members of FDATA, FGS is a member of the Payments Canada Stakeholder Advisory Committee, Canadian Lenders Association (CLA), Canadian Innovation Exchange (CIX), Financial Data Exchange (FDX), and the Canadian Prepaid Providers Association (CPPO).

Innovation is at the core of what FGS does – its dynamic team of fintech experts, innovators, and designers create growth strategies for Canada’s largest companies by looking at their external and internal forces, what their customers want, to provide recommendations for products and solutions. They embrace a culture of experimentation and learning focused on minimal investments to assess, define, test, refine, and validate new products.

FGS hosts a podcast, The Disrupticons, intending to explain how various innovations—from artificial intelligence to digital banking to Open Banking—will disrupt the financial services industry for the benefit of the average citizen.

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