Financial Technology Archives - Page 3 of 3 - Financial Data and Technology Association (FDATA)

December 13, 2021by rebecca rebecca No Comments

Member Spotlight: Morningstar

Morningstar empowers investor success by providing independent investment data, research, and analysis to investors of all kinds. This spirit of independence and transparency ignited in 1984, when Joe Mansueto left his job as a stock analyst. He realized that investors lacked the information they needed to make intelligent decisions about which investments best fit their plans. At the same time, he saw mutual funds growing in popularity as the tides were shifting away from company pensions to 401(k) plans. What was missing, he thought, was investment research for the average investor. Joe turned his idea into a new business with high aspirations—to help investors reach their financial goals.

Today, Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $260 billion in assets under advisement and management as of September 30, 2021. Morningstar is a global firm with operations in 29 countries.

Individual investors use Morningstar to make educated investment decisions. These investors want pertinent facts they can trust from an independent source, delivered in easy-to-understand formats. Financial advisors and other investment professionals turn to Morningstar for tools that help them research, analyze, present, and support their investment ideas. Morningstar’s research, analytics, and investment management services help advisors make more efficient use of their time and deliver better investment outcomes to clients.

The backbone of Morningstar’s independence and transparency is its commitment to research that illuminates investing. Recently published research available on www.morningstar.com includes:

The “Morningstar Sustainable Investing Framework” provides the critical need for clarity in the rapidly growing environmental, social, and governance investing space.
Morningstar’s behavioral science team recently published, “Drivers of Savings Inequality by Race and Place,” on factors that influence the differences in savings rates in American households.
Newly published, “The State of Retirement Income,” reassesses safe withdrawal rates for retirees, finding that the standard rule of thumb should be lowered to 3.3% from 4%.

Morningstar® ByAllAccounts^SM and FDATA
Morningstar ByAllAccounts is a data aggregator built to deliver high-quality, interoperable account data for the complex needs of the wealth management industry. It works closely with the FDATA Community and is the only aggregation provider that focuses exclusively on investors, advisors, and the enterprises who support them.

“At ByAllAccounts, the data we provide our customers is mission critical to powering holistic financial planning,” says Katy Gibson, head of product for Morningstar ByAllAccounts. “As such, we are big proponents of open banking because it gives us the ability to connect to reliable and secure data sources with minimal connectivity disruptions. As members of FDATA we will continue to advocate for the investment use case, ensuring the unique needs of investors and professionals that serve them are met.”

For more information on Morningstar and Morningstar ByAllAccounts, click here.

November 12, 2021by rebecca rebecca No Comments

Member Spotlight: MX

Founded in 2010, MX helps organizations everywhere connect to consumers’ financial data to deliver intelligent and personalized money experiences. MX leads the industry with the most secure, reliable and direct API connections to the world’s top financial institutions using the most advanced AI and machine learning enhancement engine to categorize transaction data with 98 percent coverage. By connecting with 16,000 financial institutions and fintechs, MX provides the industry’s most reliable and secure data connectivity network reaching more than 200 million consumers worldwide.

MX has been a leader in the open banking movement in North America with their approach to modern connectivity. Chief Advocacy Officer, Jane Barratt, explained to Bankrate, “Open banking isn’t something that you only need once when you apply for a mortgage. It means you can use the data that you have, it’s yours, and [you can] share it with companies that can help you improve your financial health. Whether it’s access to cheaper forms of credit, use different money management tools or whether it’s to set up direct payments. There are [numerous things you can do to make] your money more automated and it is all based on data availability.”

With the launch of MXaccess, MX provides an open finance API platform for banks, credit unions, digital banks and digital banking providers. MXaccess improves the data sharing experience for customers by removing friction and frustration due to broken connections caused by screen scraping and provides a transparent and secure method to share data.

In addition to improving the data sharing experience for the financial industry’s ecosystem, Tearsheet recently honored MX with its Best Aggregator/Fintech Partnership Award for 2021. MX won the award for its work with FormFree, a technology company that improves lenders’ ability to make more informed decisions about borrowers and minimizes lenders’ risk via a seamless loan application experience for borrowers. By using MX’s modern connections, the average aggregation time for FormFree connections fell 89 percent, declining from an average of 3 minutes and 30 seconds to just 22 seconds. This improvement boosted FormFree’s revenue by 15 percent.

MX’s CEO Ryan Caldwell has made it clear that MX is on a mission to improve the financial ecosystem by increasing trust, managing risk and enabling the exchange of customer data to improve outcomes and financial health. Last year, Caldwell explained to KSL.com that 80 percent of the U.S. workforce lives paycheck to paycheck causing individuals and families to feel “real pain” and serious stress. MX is helping ease that pain by working with traditional financial institutions and fintechs to aggregate accounts and credit cards into one platform making it easier for individuals and families to make data-driven decisions and become financially strong.

November 4, 2021by rebecca rebecca No Comments

Member Spotlight: Basis Theory

According to Government Technology magazine, there were more than 1,900 data breaches in the United States in 2020. In 2019 and 2020 alone, about 16 billion records were breached, and the average cost for a single breach is $7.7 million for companies with less than 500 employees. Breaches also grew in severity between 2019 and 2020.

At the same time, there are projected to be more than 25 billion internet-connected devices online by the end of this decade. That means more data. In fact, the quantity of data creation is expected to increase to more than 180 zettabytes over the next five years.

These numbers boggle the mind — and they put consumers, businesses, and policymakers on edge.

Enter Basis Theory.

Basis Theory has built a developer platform for encryption and tokenization that can accommodate any type of data (including sensitive payments data). The company, launched in 2021 and fully distributed, helps financial services and financial technology clients stay in complete control of their customer’s data without taking on the compliance burden. The company was built during the COVID-19 pandemic, when, overnight, consumers become even more reliant on technology to shop, order take out, see their doctor and, of course, bank. Over those months of isolation, founders Brian Billingsley, Colin Luce, and Ben Milne and their team of engineers “built a secure PCI-compliant foundation to enable the collection and storage of payments data” on the Basis Theory platform.

Milne has written that he, Billingsley, and Luce wanted to create a company that could “offer a product to developers globally to help make protecting data easier.” Why? As he explained, “In many cases it’s not just about securing data at rest in all of these devices but about enabling privacy for end users ensuring their data only goes to third parties who are capable of protecting it. That’s a trend [that] will continue until it’s solved by a company or a protocol, but more likely some combination of both.”

Basis Theory also helps its clients:

Adhere to privacy regulations and comply with new and upcoming regulations, domestically and internationally, including PCI and the new Nacha rules;
Optimize payments acceptance;
Safely secure and manage user credentials and third-party API keys; and
Secure any data, document, or image a client does not want stored in plaintext.

Basis Theory became a part of FDATA North American and the North American open banking movement to “ensure the safety, security and privacy of the continued proliferation of data sprawl and not let any associated concerns stifle innovation within financial services”.

April 24, 2020by rebecca rebecca No Comments

FDATA North America and Canadian Lenders Association Call for Fintech Participation in Canada’s COVID-19 Response

FDATA North America and Canadian Lenders Association Call for Fintech Participation in Canada’s COVID-19 Response

Contact for FDATA North America: Kerrie Rushton, (202) 365-6338, [email protected]
ontact for CLA: Tal Schwartz, (514) 244-2008, [email protected]

April 24, 2020, Washington, DC and Toronto -The Financial Data and Technology Association (FDATA) North America today announced its endorsement of the Canadian Lenders Association (CLA) proposal to include financial technology (fintech) participation in Canada’s COVID-19-related financial relief programs for small and medium-sized enterprises (SMEs). While Canada’s Business Credit Availability Program (BCAP) should provide emergency loans over the next three months to up to 100,000 Canadian SMEs, FDATA North America and CLA jointly assert that many small enterprises will not be well served by the program as currently outlined.

Small businesses that could be left out include those that:

Do not have existing relationships with traditional financial institutions who are overseeing the CEBA program;
Have legitimate credit needs in excess of the $40,000 limit of the Canada Emergency Business Account (CEBA) program;
Will not qualify for CEBA because their payroll is below $20,000 or in excess of $1.5 million;
Will not qualify because workers/owners are paid through dividends rather than payroll; or,
Will not qualify because key workers are contractors rather than employees on payroll.

The CLA proposal that FDATA North America has endorsed proposes to establish a special purpose funding vehicle through the Business Development Bank of Canada from which Canadian SMEs will access a target of $2 billion of funds within 90-120 days through CLA qualified fintech lenders. The program will provide necessary liquidity to small businesses that would not be able to access the BCAP through traditional financial institutions.

“The fintech community in Canada stands ready to assist the many SMEs that would be excluded from the BCAP,” said FDATA North America Executive Director Steve Boms. “Many have seen up to a 100 percent drop in their revenues which will continue for several months or more and face the prospect of a protracted economic recovery. While their long-term business prospects may remain sound, they need to survive through the short term. As some of the smallest SMEs in Canada do not have existing relationships with traditional financial institutions, it is imperative that fintech providers be authorized to participate in the BCAP.”

“Canadian fintechs have existing online systems and capabilities which allow them to efficiently originate, underwrite, and deploy BCAP loans,” said CLA’s President, Gary Schwartz. “Fintech lenders can provide significant operational support and leverage to the Business Development Bank of Canada and traditional lenders in deploying capital through their network of small business clients and will extend the reach of the existing BCAP.”

Other countries, including the United States, Australia, and the United Kingdom, have worked to include fintech offerings in their COVID-19-related small business loan programs. The U.S. Small Business Administration, for example, has in the past several days extended approvals to various non-bank lenders, including FDATA North America members, and is expected to approve further fintech applicants in the days ahead.

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), Betterment, Direct ID, Envestnet Yodlee, Fintech Growth Syndicate, Flinks, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, VoPay, Wealthica and others.

ABOUT THE CANADIAN LENDERS ASSOCIATION
The Canadian Lenders Association’s mission is to provide its members the tools to innovate and grow and to foster safe and ethical lending practices. The CLA supports the growth of companies that are in the business of lending, or providing other means of credit, to small business and individuals by non-conventional or innovative means.

January 31, 2020by rebecca rebecca No Comments

FDATA North America Statement on Department of Finance Canada Open Banking Report

FDATA North America Statement on Department of Finance Canada Open Banking Report

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

January 31, 2020, Washington, DC – The Department of Finance Canada today released Consumer-Directed Finance: The Future of Financial Services, which is the result of more than nine months of consultation with stakeholders in the financial services and financial technology sectors. Financial Data and Technology Association (FDATA) of North America Executive Director Steve Boms issued the following statement upon release of the report:

“When announcing these consultations back in January, Finance Canada said Open Banking ‘could better serve consumers and grow businesses and markets, contributing to the growth of the Canadian economy.’ That absolutely is true and this report from the advisory committee makes that evident.

“Now we get to the ‘how.’ How can stakeholders work together to create a system that puts consumers in control while safeguarding their privacy and security and introduces competition into the market? We look forward to continuing to work with Finance Canada to create a system that empowers individuals, families, and small business owners to take control of their financial lives.

“As Finance Canada has made clear, creating an Open Banking regime is a must-do task for Canadian lawmakers. The private sector, however, does not have to wait to start implementing consumer-centric open banking technology and services. Financial institutions, including those currently restricting their customers’ ability to take advantage of third-party tools, like CIBC, the Bank of Montreal and Scotia Bank, should not wait until they are forced to comply with government demands to let consumers be in control of their own data. They should start doing so now.”

In addition to its consultations with Finance Canada, FDATA North America has published white papers for Canadian and U.S. policymakers that outline the benefits of Open Banking and provide policy and oversight recommendations for lawmakers and regulators. “Opportunities in Open Banking” for the United States is here. The Canadian paper is here. FDATA North America analysis on the report’s findings is here.

Department of Finance Canada’s Report on Consumer-Directed Finance: The Future of Financial Services

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: The Alliance for Innovative Regulation, Betterment, Direct ID, Envestnet Yodlee, Fintech Growth Syndicate, Flinks, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, VoPay, Wealthica and others.