July 24, 2019, Washington, DC – Today, FDATA North America submitted comments to the US House Financial Services Committee Task Force on Financial Technology in advance of its July 25th hearing, “Examining the Use of Alternative Data on Underwriting and Credit Scoring to Expand Access to Credit.”
FDATA Fintech Task Force Letter for the Record
To watch the hearing, click here.
FDATA North America Welcomes Five New Members
Contact: Kerrie Rushton, (202) 365-6338, [email protected]
July 9, Washington, DC – The Financial Data and Technology Association (FDATA) of North America today announced it added five new members in June, bringing the association’s total membership to 22.
“The remarkable growth over the last month indicates support for Open Banking in the United States, Canada and Mexico is expanding rapidly,” said FDATA North America Executive Director Steve Boms. “Financial technology firms are eager to engage in Ottawa, Washington, D.C. and Mexico City in an effort to create a modern and safe system that puts consumers in charge of their data, and their financial lives. As Open Banking increasingly becomes a global phenomenon, we hope FDATA’s growing presence will spur policymakers in North America to act with the same haste.”
The following organizations joined FDATA North America in the last month:
“In the United Kingdom, nearly 10,000 consumers a day are signing up to access the Open Banking network,” said FDATA Global Chair Gavin Littlejohn. “Our member companies were an important part of the movement that is giving consumers more control over their financial data in Europe. To ensure their constituents have the same opportunities, North American policymakers must move quickly but deliberately. Axcess, Mogo, The ID Co., TransUnion and Wealthica, along with FDATA North America’s other member companies, provide some of the most innovative products on the market today. We look forward to a landscape where more consumers and businesses can capitalize on these tools.”
Existing FDATA North America members include: Cardlytics, Envestnet Yodlee, Flinks, Intuit, Kabbage, Lendified, Moven, Morningstsar, MX, Onist, Questrade, Quicken Loans, Petal and Plaid, among others.
FDATA North America recently 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.
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.
In advance of the first hearing of the United States House of Representatives’ Task Force on Financial Technology, titled “Overseeing the Fintech Revolution: Domestic and International Perspectives on Fintech Regulation,” the Financial Data and Technology Association (FDATA) of North America submitted a Letter for the Record on the importance of adopting a modernized financial regime, similar to other countries around the world, that provides consumers with the legal right to their financial data in a well-managed, safe and secure ecosystem.
To read FDATA North America’s Letter for the Record, click here.
For more information on the Fintech Task Force hearing taking place on June 25, 2019, click here.
Fintech bodies call for National Regulators to work with industry to prioritise customer needs ahead of other regulatory factors
The Financial Data and Technology Association (FDATA Europe), in association with the European Third Party Providers Association (ETTPA), has highlighted a material risk to individual and business consumers in the next phase of the implementation of the Regulatory and Technical Standards (RTS) of the EU’s second Payment Services Directive (PSD2).
(Download here)
ETPPA and FDATA Europe, whilst fully supportive of PSD2, have identified a series of unintended consequences of the RTS, which will cause widespread disruption to consumers and businesses which use the services of many fintech applications. Notable examples include the impact on the many millions of businesses that use SME accountancy services such as Xero, Quickbooks and FreeAgent, unless steps are now taken.
The simultaneous attempt to encourage innovation and to introduce new payment security measures is at the root of these unintended consequences, including the deterioration of existing consumer services, the introduction of security risks to banks, interruption to retail card and bank transfer payments, and significant disruption to Fintech firms who use open finance in their business models.
Whilst the RTS has had many intricate technical challenges, with lobbying and counter lobbying between banks and fintech firms, the customer disruption issues are becoming increasingly clear, and all sides now need to work together to manage these interlocking challenges, reduce the disruption and buy some time to work on resolving the outstanding issues.
The key issues are summarised as follows
FDATA and the ETTPA have suggested a new order which prioritises the needs of customers through a series of technical and practical measures.
Commenting, FDATA’s Chairman Gavin Littlejohn said:
“Open finance is the biggest and most important innovation in the financial services sector since the dawn of the internet. Customers have grown accustomed to innovative market and payment solutions that improve convenience and value. PSD2 is an important first step in creating a better framework of customer rights and protections to protect this new market.
“We have made a series of practical suggestions and we are confident both in their ability to reduce the risk, and in the good will of the EC and EBA to encourage markets to develop solutions.
“As it stands the banks, fintech firms and national regulators need to orchestrate a hierarchy of needs which puts customers first. A practical first step would be to delay any new implementation of Strong Customer Authentication which could block the traditional technology from functioning as it currently does, until such a time as the key issues are properly managed. Creating a ‘big bang’ approach to implementation, regardless of the connected circumstances, is simply creating an unnecessary cliff edge, which is easily avoided by this simple measure.
Commenting, ETPPA’s Chairman Arturo Gonzalez MacDowell said:
“During such a fast pace of change unintended consequences are always a potential difficulty.
“This is not about allocating blame – everyone is facing the right way and trying to do the right thing. But we do need to take action, and there is very little time to reduce the risk present in this next phase of implementation. We need real leadership now to navigate a path to avoid the regulations accidentally disrupting the markets they were designed to nurture.”
ENDS
NOTES TO EDITORS
Document co-authored by FDATA Europe and ETTPA. Download here.
Fintech bodies call for National Regulators to work with industry to prioritise customer needs ahead of other regulatory factors
The Financial Data and Technology Association (FDATA Europe), in association with the European Third Party Providers Association (ETTPA), has highlighted a material risk to individual and business consumers in the next phase of the implementation of the Regulatory and Technical Standards (RTS) of the EU’s second Payment Services Directive (PSD2).
(Download here)
ETPPA and FDATA Europe, whilst fully supportive of PSD2, have identified a series of unintended consequences of the RTS, which will cause widespread disruption to consumers and businesses which use the services of many fintech applications. Notable examples include the impact on the many millions of businesses that use SME accountancy services such as Xero, Quickbooks and FreeAgent, unless steps are now taken.
The simultaneous attempt to encourage innovation and to introduce new payment security measures is at the root of these unintended consequences, including the deterioration of existing consumer services, the introduction of security risks to banks, interruption to retail card and bank transfer payments, and significant disruption to Fintech firms who use open finance in their business models.
Whilst the RTS has had many intricate technical challenges, with lobbying and counter lobbying between banks and fintech firms, the customer disruption issues are becoming increasingly clear, and all sides now need to work together to manage these interlocking challenges, reduce the disruption and buy some time to work on resolving the outstanding issues.
The key issues are summarised as follows
FDATA and the ETTPA have suggested a new order which prioritises the needs of customers through a series of technical and practical measures.
Commenting, FDATA’s Chairman Gavin Littlejohn said:
“Open finance is the biggest and most important innovation in the financial services sector since the dawn of the internet. Customers have grown accustomed to innovative market and payment solutions that improve convenience and value. PSD2 is an important first step in creating a better framework of customer rights and protections to protect this new market.
“We have made a series of practical suggestions and we are confident both in their ability to reduce the risk, and in the good will of the EC and EBA to encourage markets to develop solutions.
“As it stands the banks, fintech firms and national regulators need to orchestrate a hierarchy of needs which puts customers first. A practical first step would be to delay any new implementation of Strong Customer Authentication which could block the traditional technology from functioning as it currently does, until such a time as the key issues are properly managed. Creating a ‘big bang’ approach to implementation, regardless of the connected circumstances, is simply creating an unnecessary cliff edge, which is easily avoided by this simple measure.
Commenting, ETPPA’s Chairman Arturo Gonzalez MacDowell said:
“During such a fast pace of change unintended consequences are always a potential difficulty.
“This is not about allocating blame – everyone is facing the right way and trying to do the right thing. But we do need to take action, and there is very little time to reduce the risk present in this next phase of implementation. We need real leadership now to navigate a path to avoid the regulations accidentally disrupting the markets they were designed to nurture.”
ENDS
NOTES TO EDITORS
Not-for-profits to campaign jointly on open finance initiatives.
The OpenID Foundation (OIDF), the international standardization organization which maintains a standard known as the Financial-grade API (FAPI), and the Financial Data and Technology Association (FDATA Global), the global trade association for companies working to promote ‘open finance’ and best practice financial data sharing, have signed a liaison agreement to enable them to work jointly across the world.
Under the agreement, FDATA Global, with chapters in Europe, North America and Australia/New Zealand, will lead policy efforts to implement open banking frameworks across the globe while OIDF will focus on the technology behind a digital identity solution. The agreement will:
FDATA Global works with governments, regulatory authorities, and the financial services industries to open up the financial sector all over the world to the benefits of financial data and technology, including advocating for the adoption of open banking frameworks and open banking standards.
The OIDF is an international standards development organization of leading identity and security architects, with a broad range of communities and companies developing open standards that enable firms and customers to safely interact in digital channels. The FAPI working group of OIDF has collaborated to produce the FAPI security profile, which is an integrated set of schemas, security and privacy recommendations and protocols which enables common connections that enable API to easily connect and for financial data to be safely shared and privacy protected.
As Open Banking and Open Finance initiatives develop across the world, the FAPI profile will be the starting point for markets seeking to reduce complexity, risk and engineering costs, making it easier for firms to connect and test their APIs.
Commenting, FDATA Global’s Chairman Gavin Littlejohn said:
“Open finance is the single biggest movement in financial services globally. It will change the world, and it will change the lives of young and old, rich and poor.
“The core components of delivering this change are the enshrining of the customer’s right to share their data, a regulatory environment that supports this right and an implementation capability that transitions the market access to high quality secure APIs.
“In the UK API initiative, the introduction of the FAPI security profile and FAPI conformance testing suites ensured that both sides of the API connection conformed to the profile. This had a transformational impact on the implementation experience, making connections easier between banks and fintech firms, making it easier for regulators to understand that security standards were being met, and greatly reduced the complex engineering and maintenance costs across the industry.
“As the Australian, Japanese, US and some of the European groups are developing their API initiatives, it is great to see the FAPI Security Profile discussed in the standardization agenda. FDATA Global is happy to be able to support the brilliant work of the OIDF and recommend that the FAPI working group output become the starting point of that conversation and a cornerstone of the implementation experience.”
Don Thibeau, Executive Director of the OpenID Foundation, said:
“The development of open global standards like FAPI require the painstaking commitment and contributions of a wide variety of companies, communities and individual developers. This is demonstrated in the ongoing work of the OpenID Foundation’s FAPI Work Group and the leadership of Nomura Research, Microsoft, Intuit and many others. Open standards are only as valuable as their adoption and adoption is driven by trust. The FAPI Self Certification Test Suite enables trust by helping assure interoperability across computing platforms and international regulatory regimes.
“Our collaboration with FDATA and others demonstrates the importance of the ongoing improvement of trusted standards and certification tests needed by a diverse and dynamic set of financial services players. Open Standards like FAPI enable the easy to use, secure and privacy protecting solutions for clients, consumers and consumers worldwide.”
NOTES TO EDITORS
The OpenID Foundation (OIDF), the international standardisation organisation which maintains a standard known as the Financial-grade API (FAPI), and the Financial Data and Technology Association (FDATA Global), the global trade association for companies working to promote ‘open finance’ and best practise financial data sharing, have signed a liaison agreement to enable them to work jointly across the world.
Under the agreement, FDATA Global, with chapters in Europe, North America and Australia/New Zealand, will lead policy efforts to implement open banking frameworks across the globe while OIDF will focus on the technology behind a digital identity solution. The agreement will:
FDATA Global works with governments, regulatory authorities, and the financial services industries to open up the financial sector all over the world to the benefits of financial data and technology, including advocating for the adoption of open banking frameworks and open banking standards.
The OIDF is an international standards development organization of leading identity and security architects, with a broad range of communities and companies developing open standards that enable firms and customers to safely interact in digital channels. The FAPI working group of OIDF has collaborated to produce the FAPI security profile, which is an integrated set of schemas, security and privacy recommendations and protocols which enables common connections that enable API to easily connect and for financial data to be safely shared and privacy protected.
As Open Banking and Open Finance initiatives develop across the world, the FAPI profile will be the starting point for markets seeking to reduce complexity, risk and engineering costs, making it easier for firms to connect and test their APIs.
Commenting, FDATA Global’s Chairman Gavin Littlejohn said:
“Open finance is the single biggest movement in financial services globally. It will change the world, and it will change the lives of young and old, rich and poor.
“The core components of delivering this change are the enshrining of the customer’s right to share their data, a regulatory environment that supports this right and an implementation capability that transitions the market access to high quality secure APIs.
“In the UK API initiative, the introduction of the FAPI security profile and FAPI conformance testing suites ensured that both sides of the API connection conformed to the profile. This had a transformational impact on the implementation experience, making connections easier between banks and fintech firms, making it easier for regulators to understand that security standards were being met, and greatly reduced the complex engineering and maintenance costs across the industry.
“As the Australian, Japanese, US and some of the European groups are developing their API initiatives, it is great to see the FAPI Security Profile discussed in the standardisation agenda. FDATA Global is happy to be able to support the brilliant work of the OIDF and recommend that the FAPI working group output become the starting point of that conversation and a cornerstone of the implementation experience.”
Don Thibeau, Executive Director of the OpenID Foundation, said:
“The development of open global standards like FAPI require the painstaking commitment and contributions of a wide variety of companies, communities and individual developers. This is demonstrated in the ongoing work of the OpenID Foundation’s FAPI Work Group and the leadership of Nomura Research, Microsoft, Intuit and many others. Open standards are only as valuable as their adoption and adoption is driven by trust. The FAPI Self Certification Test Suite enables trust by helping assure interoperability across computing platforms and international regulatory regimes.
“Our collaboration with FDATA and others demonstrates the importance of the ongoing improvement of trusted standards and certification tests needed by a diverse and dynamic set of financial services players. Open Standards like FAPI enable the easy to use, secure and privacy protecting solutions for clients, consumers and consumers worldwide.”
ENDS
NOTES TO EDITORS
Contact: Kerrie Rushton, (202) 365-6338, [email protected]
April 2, 2019, Washington, DC – The Financial Data and Technology Association of North America today released a new paper, “Opportunities in Open Banking,” that outlines the benefits of open banking for U.S. consumers, businesses, financial institutions and the economy.
“The ‘data revolution’ is reshaping nearly every element of Americans’ lives – how we connect, communicate, travel and work,” said FDATA North America Executive Director Steve Boms. “It’s also fueling a fundamental shift in how people and businesses spend, save and manage money around the world. To spur improved financial outcomes and to keep up with global innovation, policymakers in the United States should implement an open banking regime that provides consumers with the legal right to their financial data and builds appropriate safeguards around a well-managed ecosystem.”
The new paper discusses:
“If implemented properly, open banking will preserve the security and stability of the financial system while empowering customers and accelerating opportunities for innovation,” said Boms. “This paper provides an outline for success in the United States, based on lessons learned from other jurisdictions. Other countries, including Canada, Australia, Russia and China are moving swiftly in the direction of open banking. U.S. policymakers must act if they want to enhance financial inclusion and ensure their constituents to have similar opportunities for financial success.”
FDATA North America also recently submitted comments to the U.S. Senate Committee on Banking in response to its request for information on data privacy. In that letter, Boms argued, “Under an Open Banking system, data empowerment goes hand in hand with data privacy. By placing consumers and small businesses – the owners of financial data – at the center of the framework, end users are given complete control over their data. This construct provides them with the opportunity to improve their financial wellbeing by empowering them to use their data for value-based services of their choice, and to control which entities have access to their financial data at all times.”
FDATA’s “Opportunities in Open Banking” is available here. The letter to the Banking Committee is here.
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 by several firms whose technology-based products and services allow consumers and small businesses to improve their financial wellbeing. Its members provide approximately 3.5 million Canadians, or roughly 15 per cent of Canada’s adult population, with aggregation-based tools to better manage their finances.
Contact: Kerrie Rushton, (202) 365-6338, [email protected]
March 20, 2019, Washington, DC – In advance of a Canada Standing Senate Committee on Banking, Trade and Commerce hearing on March 21, the Financial Data and Technology Association today released a new paper, “Opportunities in Open Banking,” that outlines the benefits of open banking for Canadian consumers, businesses, financial institutions and the economy. Executive Director Steve Boms will testify before the committee tomorrow to present the paper.
“Canadians increasingly depend on technology-powered tools to improve their financial lives,” said Boms. “To foster innovation and spur improved financial outcomes, Canada should implement an open banking regime that provides consumers with the legal right to their financial data and builds appropriate safeguards around a well-managed ecosystem. For the sake of consumers’ financial wellbeing and innovation, the time to act is now.”
The new paper discusses:
“If implemented properly, open banking can preserve the security and stability of the financial system while empowering customers and accelerating opportunities for innovation,” said Boms. “This paper provides an outline for success, based on lessons learned from other jurisdictions.”
In his testimony before the Standing Senate Committee on Banking, Trade and Commerce, Boms also will discuss how open banking has been embraced by other countries, outlining how the technology-powered products and services provided by incumbent financial services and fintech firms are supporting consumers and businesses as they manage and improve their finances. “Canadian consumers are already demanding the same opportunity, and they deserve to receive it,” Boms will conclude.
FDATA’s “Opportunities in Open Banking” is available here. The hearing will begin at 10:30am EST. To watch via webcast, click here. Boms’ written statement is available here.
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 by several firms whose technology-based products and services allow consumers and small businesses to improve their financial wellbeing. Its members provide approximately 3.5 million Canadians, or roughly 15 per cent of Canada’s adult population, with aggregation-based tools to better manage their finances.