Formal Submissions
The New Zealand government has responded to our ‘Options for a CDR’ submission (September 2020) and has requested a discussion around potential involvement. Data 17th February 2020.
FDATA North America Responds to US CFPB ANPR on Consumer Access to Financial Records
February 3, 2021, Washington, DC – Today, FDATA North America submitted comments to the US Consumer Financial Protection Bureau (CFPB) in response to its Advanced Notice of Proposed Rulemaking (ANPR) regarding consumer access to financial records, or Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
In the submission, FDATA North America Executive Director Steve Boms praised the CFPB for formally beginning the process of crafting a rule in this critically important area following many years of careful examination of the customer-permissioned data access and financial services ecosystems. “FDATA North America strongly supports the authority given to the CFPB by Congress in 2010 to promulgate, by rule, a consumer financial data right that will spur greater financial services innovation and competition and improve consumer financial access and inclusion,” Boms noted.
Boms concluded the association’s submission by encouraging the Bureau “to fully utilize its Section 1033 authority to create a customer financial data right to allow consumers and small businesses to have unrestricted access to technology-based tools that can help them improve their financial wellbeing, along with other important bedrocks of an open finance regime.”
FDATA North America CFPB ANPR Submission
ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), API Metrics, Betterment, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fintech Growth Syndicate, Fiserv, Flinks, Interac, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.
UK BEIS Cross Sector Options Feedback.
Thank you for the opportunity to respond to the BEIS Smart Data Cross Sector Options. The Financial Data and Technology Association (FDATA) has a vested interest how the HMG’s Smart Data initiative is delivered to market, as our members provide valuable digital financial services under Open Banking, and they will continue to serve UK residents with expanded value propositions as Open Finance begins rolling out across the market. FDATA is on the side of consumers, innovation, and competition; we welcome HMG’s willingness to orchestrate the initiative.
In regards to BEIS’ note on creating opportunities for wider collaboration within the ecosystem, FDATA strongly suggests engaging the capabilities housed in the Global Open Finance Centre of Excellence (GOFCoE), to whom BEIS awarded an innovation grant in 2020. GOFCoE has built a Global Open Finance Technical Working Group focused on establishing harmonised and interoperable international technical standards; along side this is a Consumer Data Protection Unit, an Economic Observatory, an Economic Crime unit, and an Innovation Sandbox. All of these capabilities align with the sort of support the Smart Data Initiative would require. We strongly encourage BEIS to identify other potential ecosystem resources that would contribute to enhanced cooperation.
FDATA – OBIE VRP & Sweeping Phase 2 Consultation Response
Please provide feedback on the following points:
The need for VRP/Sweeping – why it is so much better than any other option for the customer – control, transparency, flexibility, speed, etc.
Why this cannot be limited to 2 way sweeping, as this rules out many use cases which offer the most value to customers (eg. sweeping into non-current accounts)
How the risks that are being raised by some during the consultation are either nothing to do with VRP or significantly reduced by VRP, and why VRPs actually offer customers better outcomes
How sweeping providers will use smart/ethical AIS algorithms and tight/right sized VRP parameters to only sweep money the customer can afford – and why it’s 100% aligned to their business model to protect the customer this way
How, as regulated parties, TPPs are required to manage risk and look after customers, including if they have complaints
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.
FDATA Response to HM Treasury’s Financial Services Future Regulatory Framework Review
On behalf of the membership of FDATA Europe, please find our response to the questions set forth in the Financial Services Future Regulatory Framework Review, Phase II Consultation.
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.”
Prospects for the Brazilian fintech scene in 2021
In 2020, fintechs in Brazil showed their resilience and attracted US$ 1,7 billion in investments. Check some of the trends and opportunities in the sector this year.
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.”