Formal Submissions
On behalf of our members FDATA responded to a call for formal submissions by the Treasury Department on
the proposed changes to Joint Account – Opt-Out model for Open Banking.
‘OPT-OUT’ JOINT ACCOUNT DATA SHARING MODEL – SUBMISSION
Open Finance, a precursor to the Consumer Data Right, began as a grassroots movement, campaigning for the legal rights of consumers and businesses to have control of their financial data and share this data with businesses of their choice digitally. It is part of a broader suite of Open Data initiatives to empower consumers and small businesses to access, change and benefit from the data held about them by governments and institutions.
The initiative has gathered considerable momentum; various markets worldwide assess, adopt, or implement laws and regulations to support it. In the EU, Canada, USA, Mexico, Brazil, India, Japan, Australia, Russia, New Zealand, South Korea, Singapore, and many other significant markets are already at varying stages of review, policy development or implementation.
Member Spotlight: SaltEdge
Founded in 2013 , Salt Edge Inc., a leader in creating and providing open banking solutions, takes intercommunications and interoperability between banks, third-party service providers, and their end-users to a whole new level. The company achieves this goal by creating stable, secure connectivity channels between financial institutions and their consumers.
For consumers, Salt Edge’s solutions help create tools that give them a wider view of their finances. With Oval Money Ltd., for example, Salt Edge provided an API to track users’ expenses and earnings automatically from any account. Open banking is integral to this product. As Salt Edge explained, “This wide functionality is only possible if all the users’ transactions are consolidated automatically from various sources and they do not have to input data manually.”
For lenders, Salt Edge helps users access a new channel of real-time financial data that automatically verifies applicant’s identity, account number, income sources, and balance in real time. Lenders can evaluate a potential borrower’s financial behavior more accurately, which helps them keep risk under control.
Today, Salt Edge is connected to more than 5000 financial institutions across the world. By joining FDATA North America, Salt Edge plans to bring the same cohesive, secure, consumer-friendly system to individuals, families, and small businesses in Canada and the United States. “We’re all into proactive engagement, pursuing an appropriate legal framework, which will support the development of open-banking-based financial services. Open banking in North America is quite different from the European practice, so getting a mandated and regulated state of certainty will definitely catalyze things to move forward,” Salt Edge CEO Dmitrii Barbasura said.
In a February 2021 blog post, Barbasura outlined the six elements necessary to make open banking work in any country. These include:
- Control – any market participant that seeks to get access to the open banking ecosystem should be verified and licensed.
- Providing third parties with access to financial data or payment initiation capabilities should apply the most secure, but at the same time, convenient means of authorization and user authentication.
- Uniformity of conditions.
- Insuring every involved party against fraudulent acts, data breaches, operational disruption, and other risks.
- Ensuring monetization of APIs.
- Access to all consumer accounts, if a consumer allows it. Accounts will determine the next step in open banking evolution – open finance.
Barbasura concluded, “Combined with mobile platforms, open banking provides secure and fast access to financial services anywhere and in the most comfortable format for the user.”
Salt Edge joined FDATA North America in April 2021.
Member Spotlight: BillGO
Founded in 2015, BillGO is driven by the core belief that everyone deserves access to a healthy financial future. BillGO helps facilitate this access by providing consumers, billers, fintechs and financial institutions with a faster, smarter, more secure way to pay and manage bills and subscriptions.
So how can bill payment technology improve financial wellbeing?
Consider this: even though most consumers trust financial institutions (FIs) to manage their money, only 22 percent of them use the bill pay technology their FIs provide. Seventy-six percent, meanwhile, pay their online bills directly to biller websites, which is both a cumbersome and risky method of managing bills.
When asked why they reject FI-offered bill pay technology, many consumers say their FI bill pay technology is outmoded. It is difficult to use, offers little visibility and fails to provide real-world bill payment confirmation. This lack of confirmations has real-world results – namely late fees. A 2019 study revealed late credit card payments alone cost consumers up to $3 billion a year.
By offering a modernized, real-time bill pay solution, BillGO not only helps consumers avoid late payments and fees by sending due date reminders but also provides consumers with a single, consolidated tool to manage bills and payments, eliminating the need to log into multiple biller sites each month to manage their financial obligations.
BillGO’s mission doesn’t stop there. In 2020, BillGO launched its Bill Pay Relief Hub, a resource originally conceived to help consumers impacted by bills brought on by COVID-19. Since then, the Hub’s mission has expanded, providing help to consumers facing an array of economic setbacks. The Hub now connects consumers to more than 300 businesses and FIs offering payment relief. In 2020, Banking Tech Awards named the Hub one of 2020’s Best COVID Responses by a Fintech.
Speaking of awards, Fortune recently named BillGO one of the “Best Places To Work” in the financial services industry. And last March, Forbes named BillGO one of “America’s Best Startup Employers” because of its reputation as an employer, its high levels of employee satisfaction, and its potential for growth.
BillGO’s award-winning real-time bill management and payments platform transforms the dreaded necessity of managing and paying bills into an opportunity for financial well-being. The company currently serves more than 32 million consumers, 8,000 FIs and nurtures relationships with more than 170,000 billers and suppliers nationwide and is headquartered in Colorado, with offices in Ohio and Washington state, employing more than 250 people.
FDATA Response to FCA Consultation Paper 21/03 Changes to the SCA-RTS
Below is FDATA Europe’s response to the consultation on the SCA-RTS. We are grateful for the opportunity to respond, and would like to highlight a few points before presenting our formal response and recommendations:
• Article 10a exemption for TPPs needs to explicitly carve out the requirement to perform SCA every 90 days, and make it clear that ASPSPs do not have the option to require it after the initial connection is made and consent is in effect
• Any delays in the implementation of the proposed revisions to SCA-RTS will have materially negative impact on the entire UK market; 2023 is too long to wait, as a number of existing firms will necessarily leave the market due to customer attrition and churn, resulting in a spectacular failure of Open Banking. The timeline for change must be expedited.
The future oversight of the CMA’s open banking remedies, consultation
Below is FDATA Europe’s response to the consultation put forward by the CMA on UK Finance’s report on the proposed Open Banking Future Entity; we are grateful for the additional time provided in order to properly respond to the questions raised. We would like to highlight few points before presenting out formal response and recommendations: Do not rush this decision: any future entity needs to be future proof.
Member Spotlight: Codat
Codat works with small businesses across the globe to help them harness their data in a way that allows firms to grow. Founded in the United Kingdom in 2017, Codat recently expanded its operations into North America.
How will businesses in the United States and Canada benefit from this move?
During the COVID-19 crisis, Codat’s products have been a lifeline for small firms. Tens of thousands of small businesses have used apps, services, and financial products powered by Codat to allow them to harness company data. With Codat, these businesses no longer have to spend hours collecting the data required to submit a loan application, for example.
Via its single API, Codat’s Core product enables real-time data access and visibility, offering deep insight into the business’s financial picture. This unlocks scores of opportunities for small businesses, and allows them to more quickly streamline application processes. Thanks to Codat, which integrates everything from accounting to commerce data, and paired with Open Banking, lenders can easily corroborate the actual financials of a business.
Combining and cross-referencing multiple data sources allows lenders to form a complete and verifiable understanding of a business customer, far beyond what is available from credit bureaus. Moreover, Codat can also use data to help identify and stop potential fraud, a key barrier to lending. According to a 2019 LexisNexis study, fraud losses as a percentage of revenues amount to 5.8 percent for digital lenders, 4.5 percent for small banks and credit unions, and 2.9 percent for larger banks.
PayPal and American Express recently announced they made strategic investments in Codat. Zettle, a PayPal payments company, uses Codat’s technology to transfer point of sale transaction data into their merchants’ accounting software. “The data connectivity Codat enables is a game changer for small-to-medium businesses who want the flexibility to use their preferred tools to run and grow their business,” said Peter Sanborn of PayPal Ventures.
Codat joined FDATA North America in March 2021. Gabriel MacSweeney, who is in charge of strategic partnerships and commercial strategy for the company, said, “At Codat, we are delighted to lend our voice to discussion on the future of open finance in North America. Joining FDATA North America aligns with our mission to enable all the systems and services that a small business uses to work together seamlessly, and underscores our strategic focus and growth plans in the region.”
Member Spotlight: Experian
While Experian is primarily recognized as one of the three nationwide credit bureaus, the company has a diverse business that provides an array of data and analytical tools. At its core, Experian is committed to helping people and businesses take control of their financial well-being and to seize new opportunities.
In many parts of the world, including the United States, a positive credit history can be the gatekeeper to many of the things we want in life. To this end, Experian has been at the forefront of developing products and services that help consumers gain access to fair and affordable credit and understand their financial health.
Experian’s commitment to creating greater financial opportunity for consumers is evident in some of the company’s most recent innovations, including Experian Boost. This free, first-of-its-kind service relies on consumer-permissioned data and open banking systems, allowing consumers to play an active role in building their credit profiles. Through Experian Boost, consumers can grant Experian permission to access the checking account, savings accounts, or other demand deposit accounts as well as credit cards to identify reoccurring bill payments, such as cell phone payments, internet payments, utility payments, video streaming service payments and more. Experian then adds the positive payments to the consumer’s credit report and an updated credit score is delivered to the consumer in real time. Consumers have complete control over the process and can add, keep or remove accounts at any time.
More than six million consumers have connected to the service since it launched in North America in March 2019. Two out of three users see credit score improvements by using Experian Boost with an average boost of more than 10 points.
Following the successful launch in North America, Experian Boost is now also helping consumers in the U.K. take control of their credit.
“With Experian Boost, we are inviting consumers to play an active role in building their credit profiles, while providing lenders with a more detailed picture of a consumer’s financial situation,” said Alex Lintner, group president Experian Consumer Information Services. “Our role is to help bring financial inclusion to every adult in the world and we are putting consumer needs at the heart of our innovative culture. Experian Boost is just an example of this effort in action.”
Experian has recently expanded its consumer products to help consumers
with the management of their personal financial data. Experian’s Financial Health product leverages open banking technology to provide consumers with a holistic picture of their credit and finances, while offering the ability to monitor their transactions for fraud and spending thresholds. These insights provide consumers with the tools to manage their finances, monitor their financial health and security and meet their financial goals.
Experian also has developed its AccountView product suite, in partnership with Finicity, to enable consumers to more easily share their financial data to support lending and rental decisions in mortgage, personal lending and tenant screening. By leveraging these services, a consumer can provide permission to lenders and screeners to access their financial accounts, including checking, savings, 401K and brokerage accounts. This capability aggregates the transaction history and presents it back as a Verification of Income and Employment (VOIE), Verification of Income (VOI), Verification of Employment (VOE) or Verification of Assets (VOA) report. These reports reduce the number of documents that a consumer must physically present and makes it easier and more efficient for consumers to apply for credit.
Consumer permissioned data and open banking systems leveraged by Experian have played a critical role in the company’s ability to create meaningful change in the lives of consumers, including those in underserved and marginalized communities. As part of its ongoing commitment to consumer financial health, Experian will continue to invest in consumer permissioned data and open banking technologies to help consumers gain access to fair and affordable credit.
Experian employs more than 16,000 and supports clients and consumers in more than 79 countries.
Experian joined FDATA North America and FDATA Europe last year. To learn more about Experian, please visit www.experian.com.
PSR Consultation on Consumer Protections for Interbank Payments
FDATA Response to Payment Systems Regulator Consumer Protection in Interbank Payments: Call for Views (CP21/4)
FDATA appreciates the opportunity to respond to the PSR’s Call for Views on Consumer Protection in Interbank Payments. We address the questions contained in the CfV, and have also provided an overview of our analysis of PSR CP21/4. Below the question responses, please find a table addressing section by section assumptions listed in the CfV for which FDATA members have a rebuttal.
FDATA North America Welcomes Three New Members
Contact: Kerrie Rushton, (202) 365-6338, [email protected]
April 6, 2021, Washington, DC – The Financial Data and Technology Association (FDATA) of North America today announced it has added three new members—BillGO, Codat, and ValidiFI— boosting the organization’s roster of member companies and organizations to 28.
“We’re excited to add BillGO, Codat, and ValidiFI to the growing list of companies united in their belief that that consumers and small businesses should have full control over their own financial data,” said FDATA North America Executive Director Steve Boms. “Financial technology companies are well positioned to help individuals, families, and small businesses improve their financial well-being as they fight their way out of the global economic crisis caused by COVID. Open finance maximizes the potential of fintech to improve financial access and inclusion, and BillGO, Codat, and ValidiFI will be important allies in this effort.”
Boms outlined how consumer-directed finance will improve financial inclusion in a recent Morning Consult op-ed.
The following organizations recently joined FDATA North America:
- BillGO is an award-winning real-time bill management and payments platform that serves more than 30 million consumers and thousands of financial institutions, fintechs, and billers. Visit them at https://www.billgo.com.
- Codat empowers more small businesses around the globe by ensuring their systems and services are interconnected, allowing them to harness their data to access bespoke products. Visit them at https://www.codat.io.
- ValidifI is a technology company that delivers data and payment solutions for companies in the financial services industry and provides insights that help them improve the payment process. Visit them at https://validifi.com.
These firms discussed the importance of FDATA North’s mission to advance data access and open banking in North America:
- BillGO: “Because BillGO believes everyone deserves access to a healthy financial future, we’re thrilled to join the FDATA and work alongside other organizations that share that commitment,” said Jay Plueger, SVP Alliances and Corporate Development at BillGO. “We look forward to collaborating with the FDATA and its members to shape standards and principles that advance our industry while protecting the interests of consumers.”
- Codat: “At Codat, we are delighted to lend our voice to discussion on the future of open finance in North America. Joining FData North America aligns with our mission to enable all the systems and services that an SMB uses to work together seamlessly and underscores our strategic focus and growth plans in the region.” – Gabriel MacSweeney, Strategic Partnerships & Commercial Strategy
- ValidiFI: “Access and insight into the rapidly changing regulatory environment for open banking and finance is crucial,” stated Jesse Berger, ValidiFI President and Chief Operating Officer. “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, competitive service offerings, and a better deal.”
Existing FDATA North America members include: air (Alliance for Innovative Regulation), APImetrics, Betterment, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, VoPay, Wealthica, Xero, and others.
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.