News

by rebecca rebecca No Comments

FDATA North America Sends Letter to CFPB Advocating for Distinction Between Digital Wallets and Passthrough Payment Platforms

Contact: Laine Williams, (202) 897-4757, [email protected] 

May 2, 2024, Washington, DC – The Financial Data and Technology Association of North America (FDATA), a trade association representing more than 30 financial technology companies and consumer-permissioned data access platforms in Canada and the United States, today sent a letter to the Consumer Financial Protection Bureau (CFPB or Bureau) addressing concerns in the Bureau’s approach to digital wallets and passthrough payment platforms in both its Notice of Proposed Rulemaking (NPRM) on Personal Financial Data Rights and its NPRM on Defining Larger Participants of a Market for General-Use Digital Consumer Payments.

The letter highlighted a critical oversight in the CFPB’s draft regulations, which grouped digital wallets—designed to hold consumer assets—with passthrough payment platforms that merely facilitate transactions via accounts at other financial institutions. FDATA emphasized that this conflation could compromise regulatory effectiveness, confuse consumers, and stifle innovation in the market, with key points from the letter including:

  • General Definitions: The proposed rules offered overly broad definitions for digital wallets that did not acknowledge the operational distinctions from passthrough payment services.
  • Regulatory and Consumer Impacts: The lack of distinction was criticized for potentially imposing undue regulatory burdens on passthrough platforms without offering additional consumer protections.
  • Call for Tailored Regulation: FDATA North America advocated for the CFPB to refine its regulations to accurately mirror the diverse functionalities within digital financial services, ensuring focused and effective consumer protections.
  • Concern Over Data Duplication: The current approach could lead to unnecessary and confusing duplications in regulatory data requirements.
  • Innovation at Risk: The letter emphasized the importance of a regulatory framework that understands the operational realities of digital finance to foster innovation and ensure consumer safety.
  • Plea for Precise Rulemaking: FDATA North America stressed the need for rulemakings that distinguish between the various digital financial services, benefiting consumers, providers, and the broader financial ecosystem.

FDATA called on the CFPB to exempt passthrough payment platforms from being considered data providers under its Personal Financial Data Rights rule and from the supervisory requirements set forth in its payments Larger Participant Rulemaking.

A full copy of the letter is available here.

by rebecca rebecca No Comments

Video Member Spotlight: Xero

This member spotlight features FDATA NA Spotlight with Michael Cascone, Vice President, Government Experience, Americas, Xero. Michael shared insights on how Xero is championing Open Banking to alleviate the financial burdens on small business owners across North America.

by rebecca rebecca No Comments

Video Member Spotlight: Ozone API

This member spotlight features Eyal Sivan, General Manager, North America, aka. Mr. Open Banking, Ozone API. Mr. Open Banking delves into how SMEs can leverage new offerings from their suppliers and enhance their own services to customers, unlocking new avenues for growth.

by rebecca rebecca No Comments

FDATA North America Statement on Budget 2024 Initiating Consumer-Driven Banking Framework

Contact: Laine Williams, (202) 897-4757, [email protected] 

Washington, DC, April 16, 2024 – The Financial Data and Technology Association of North America (FDATA), a trade association representing more than 30 financial technology companies and consumer-permissioned data access platforms in Canada and the United States, today applauded the government’s inclusion of a framework to deliver consumer-driven banking as part of Budget 2024.

FDATA North America, which has long advocated for consumer and small business benefits that an open finance framework will deliver for Canadians, commended the government for outlining a detailed vision of the design of open finance in Canada and a commitment to begin implementing the system through legislation this spring and announcing its intention to create an open finance framework in Canada that is interoperable with the framework that the U.S. Consumer Financial Protection Bureau will finalize later this year. As the government begins its work to finally deliver open finance in Canada in 2025, FDATA North America encourages the Department of Finance to include small business accounts under the scope of the framework to ensure that Canadian SMEs receive the same open finance benefits as consumers.

Steve Boms, Executive Director of FDATA, released the following statement:

“We are greatly encouraged by the Government of Canada’s commitment to advance open finance in Canada. The inclusion of Consumer Driven Banking in Budget 2024 marks a significant step for the financial empowerment of consumers and small and medium-sized enterprises. Once successfully implemented, this will foster a more innovative Canadian financial services marketplace, and promote a fairer and more inclusive financial services ecosystem. It reflects a global trend towards consumer-centric financial services and brings Canada in line with the regimes established by nearly every other G-7 nation.

We applaud the comprehensive framework announced in the budget and look forward to working closely with the government as it actualizes open finance to benefit Canadian consumers and small businesses.”

by rebecca rebecca No Comments

Video Member Spotlight: ByAllAccounts

This member spotlight features Brian Costello, Head of ByAllAccounts Data Aggregation Strategy and Governance, Morningstar Wealth. Brian tells us how ByAllAccounts’s role in providing connectivity of consumer-permissioned financial data is critical in realizing the full potential of this data and explains ByAllAccounts’s high level of engagement with policymakers to promote finalization of the Dodd-Frank Section 1033 rulemaking.

by rebecca rebecca No Comments

FDATA North America April Newsletter

FDATA North America Monthly Newsletter for April 2024

Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators. Know someone who’d like to receive these monthly updates? Send them here to sign up.

FDATA North America News

FDATA NA Sends Letter to Wyoming Governor Mark Gordon and Wyoming Legislators Urging Revision of Open Banking Legislation. On March 15, 2024, the Financial Data and Technology Association of North America (FDATA) sent a letter to Wyoming Governor Mark Gordon and legislators, including Representatives Cyrus Western, Daniel Singh, Mike Yin, and Senators Alfie Ellis, Tara Nethercott, Chris Rothfuss. The letter, motivated by the recent enactment of HB 145, raised concerns over its alignment with the essential tenets of open banking, particularly the principle that allows consumers and small businesses complete control over the sharing of their financial data. As a globally recognized advocate for consumer-permissioned, third-party access to financial data, FDATA underscored the importance of revising Wyoming’s open banking legislation to reflect global best practices. With the Consumer Financial Protection Bureau on the verge of implementing a federal open banking framework, FDATA offered to provide input and collaborate with Governor Gordon and the state’s legislators to explore solutions that could establish Wyoming’s open banking regulations as a model for consumer empowerment and market competitiveness. FDATA released a statement on its submission of the letter, which can be found here.

Member News & Activity

API Metrics published a blog highlighting the importance of interoperability in the digital transformation of financial services. Through their advanced solutions and involvement in standards bodies like FDX and the OpenID Foundation, APIContext is leading the way in fostering financial inclusivity and innovation by ensuring APIs are built with open standards, focusing on reliability, security, and meeting the challenges of Open Banking standards.

Basis Theory published a blog emphasizing their commitment to security, especially in protecting Personal Health Information and other sensitive data, highlighting recent achievements of SOC2 Type1+HIPAA and ISO 27001 certifications. These certifications demonstrate their adherence to stringent security standards and regulations, ensuring the protection and compliance of user data through technical and organizational safeguards.

Codat posted a blog underscoring the potential of banking data as a key asset in the lending industry for making informed decisions on creditworthiness. The blog emphasized the need for lenders to automate the processing and categorization of banking data to unlock actionable insights and improve underwriting efficiency, highlighting Codat’s role in simplifying this process through its technology that connects open banking and accounting data for enhanced decision-making.

Envestnet Yodlee posted a blog discussing the burgeoning interest in open banking within South Africa as part of a global trend toward increased data-sharing and financial innovation. The blog highlighted South Africa’s potential to lead in open banking, given its Financial Sector Conduct Authority’s interest in an Open Finance regime, the proactive stance of major banks, and the opportunity to enhance financial inclusion for the unbanked or underbanked, promising a series of deeper explorations into the benefits and regulations of open banking in the region.

Flinks published a blog detailing the growing momentum of Open Banking in Canada, driven by consumer and business demand for personalized financial services and the Canadian government’s commitment to establishing a consumer-driven banking framework. Highlighting Flinks’ role in facilitating this transition, the blog showcased their partnerships and contributions to developing Open Banking capabilities, positioning them as a key player in enhancing financial innovation, competition, and consumer choice in Canada’s financial ecosystem.

GoCardless published a press release announcing its approval as a supplier on the Crown Commercial Service’s Open Banking Dynamic Purchasing System framework, enabling it to bid for account information and payment initiation services tenders from UK public sector bodies. This inclusion marks a significant step for GoCardless, allowing it to expand its strategic opportunities within government sectors and strengthen its presence in the charity sector.

MX published a blog addressing the struggle of many financial providers to fully utilize consumer financial data for enhancing customer and business outcomes. Highlighting findings from a Forrester Consulting study, the blog underscored the critical need for financial institutions to embrace data intelligence, invest in breaking down data silos, and leverage technology and partnerships to unlock the transformative potential of this data for improved personalization and decision-making.

Plaid published a blog detailing how integrating with Plaid’s Payment Initiation services helped Paysend, a global payment platform, to overcome challenges in customer bank account top-ups, resulting in a 125% increase in transaction volume within a year. The partnership enabled Paysend to offer instant bank transfers, significantly improving customer satisfaction and expanding their service with successful launches in the UK and plans for further expansion across the European Union.

Trustly posted a blog highlighting the advantages of ACH autopay for billers, emphasizing its potential to significantly reduce processing fees compared to card payments, thereby maximizing revenue and safeguarding cash flow. The blog also discussed how leveraging Open Banking can address the inefficiencies of traditional ACH setups by providing a streamlined user experience, reducing manual input, and enhancing security, ultimately increasing ACH autopay adoption among customers.

VoPay was featured in a PYMNTS article announcing its partnership with Cross River Bank to expand its embedded payments technology into the U.S. market, providing VoPay with access to major payment rails and networks along with Cross River’s regulatory expertise. This collaboration aligns with VoPay’s goal of delivering innovative financial solutions and will enable the company to offer a wider range of payment services including ACH, Same-Day ACH, RTP, FedNow® Service, and Pull-from-Card, enhancing its North American service offerings.

Events and Submission Deadlines

by rebecca rebecca No Comments

FDATA North America Sends Letter to Wyoming Governor Mark Gordon and Wyoming Legislators Urging Revision of Open Banking Legislation

Contact: Laine Williams, (202) 897-4757, [email protected] 

March 15, 2024 Washington, DC – The Financial Data and Technology Association of North America (FDATA) today sent a letter to Wyoming Governor Mark Gordon and Wyoming legislators including Representative Cyrus Western, Representative Daniel Singh, Representative Mike Yin, Senator Alfie Ellis, Senator Tara Nethercott, and Senator Chris Rothfuss, highlighting concerns about a Wyoming bill (HB 145) that was recently enacted into law and offering to provide input into Wyoming’s open banking regulations and financial innovation agenda.

As a leading advocate for consumer-permissioned, third-party access to financial data globally, our letter underscored the importance of aligning Wyoming’s open banking framework with global best practices, which provide complete control to consumers and small businesses over what data they decide to share with third parties. We pointed out that HB 145 deviates from this important open banking tenet.

As the Consumer Financial Protection Bureau moves to implement a federal open banking framework later through rulemaking later this year, we offered to engage in further discussions with Governor Gordon and the legislators to explore solutions that would make Wyoming’s open banking regulations a model for consumer empowerment and market competitiveness.

A full copy of the letter is available here.

by rebecca rebecca No Comments

FDATA North America March Newsletter

FDATA North America Monthly Newsletter for March 2024

Welcome to FDATA North America’s monthly newsletter! These regular dispatches will share developments from our organization and our 30+ member companies, all of which are promoting financial access and inclusion with open finance use cases. We also include a list of upcoming industry events, and coverage of any market developments that impact fintech innovators. Know someone who’d like to receive these monthly updates? Send them here to sign up.

FDATA North America News

FDATA NA Submits Comments to Canada’s Pre-Budget Consultations 2024On February 9, 2024, FDATA NA submitted comments to Canada’s Department of Finance as part of its pre-budget consultations for Budget 2024. The submission advocated for Canada to enhance the inclusion of consumer-driven banking (CDB) outlined in the 2023 Fall Economic Statement, aiming for a comprehensive Canadian open finance framework. Our comments also called on the Canadian government to legislate a CDB Framework in Budget 2024, establish a robust governance entity to oversee this framework, and outline a vision for open finance, signifying the next advancement in financial services. The submission noted that the proposed governance entity should be neutral, transparent, capable of making quick, binding decisions, and accountable, ensuring the framework’s success and sustainability while promoting market innovation and competition for the benefit of Canadian consumers and SMEs. FDATA released a statement on its submission of the comment letter, which can be found here.

FDATA NA Submits Comments to Canada’s Consultation on Strengthening Competition in the Financial SectorOn February 28, 2024, FDATA NA submitted comments to Canada’s Department of Finance regarding the consultation on strengthening competition in the financial sector. Our comments outlined four initiatives crucial for creating a more inclusive, innovative, and competitive financial ecosystem: 1) advancing Consumer-Driven Finance (CDF) and adopting an open banking regime to empower consumers and SMEs with control over their financial data; 2) accelerating the deployment of the Real-Time Rail (RTR) to modernize payment infrastructure, enabling instant payment processing; 3) implementing the Retail Payment Activities Act (RPAA) regulations for payment service providers (PSPs) within a robust regulatory framework to enhance payment system security and efficiency; and 4) amending the Canadian Payments Act (CP Act) to allow non-bank payment providers direct access to payment rails. FDATA released a statement on its submission of the comment letter, which can be found here.

Member News & Activity

API Metrics published a blog post announcing the formation of APIContext Inc., a merger between APImetrics Inc and Contxt Ltd, to offer comprehensive solutions for API oversight and integrity. The newly formed company aims to address the challenges of creating reliable, productized APIs by providing end-to-end visibility, proactive risk measures, and comprehensive monitoring capabilities to empower businesses.

Basis Theory posted a blog explaining the intricacies of global payment processing, highlighting its necessity for e-commerce businesses to reach an international customer base and the variety of services offered by global payment processors to facilitate cross-border transactions efficiently. The blog emphasized the importance of selecting the right global payment processor, considering factors such as supported currencies, fees, security, and integration capabilities, to enable businesses to cater to global markets effectively.

Betterment’s VP of Legal, Joshua Rubin, discussed on the #inSecuritiespod how the company navigates the complex regulatory landscape, including its approach to the fiduciary rule, by addressing overlapping regulations and explaining why their stance sometimes diverges from the broader financial services industry’s perspective on rulemaking proposals.

EQ Bank was mentioned in a Business Wire article for partnering with Trulioo, an industry-leading identity verification platform, to streamline its digital banking onboarding process. This partnership enables EQ Bank to provide a frictionless customer experience with enhanced security and compliance, utilizing Trulioo’s advanced document verification, AI checks, and customizable workflow solutions.

Flinks posted a blog highlighting the growing importance of Account-to-Account (A2A) payments, describing them as a significant evolution in the financial transaction landscape. A2A payments, which enable direct fund transfers between accounts and bypass traditional intermediaries, are gaining traction due to their speed, cost efficiency, and enhanced security, supported by financial institutions, fintech companies, and payment processors.

GoCardless published a blog post announcing the extension of its partnership with Dyce Energy, a UK-based energy provider, for an additional three years, for easy bill collection through Direct Debit payments.

Inverite was mentioned in a BNN article for its advancements in the fintech and alternative lending sectors through its Open Banking Platform. The article noted that Inverite is revolutionizing consumer directed banking, providing innovative solutions for data enrichment, identity verification, risk management, and compliance, thereby transforming the alternative credit economy.

Morningstar Wealth published a blog highlighting the significance of diversity, equity, and inclusion (DEI) within the U.S. financial data-sharing ecosystem, particularly focusing on the evolving open banking system. Brian Costello, Head of Data Aggregation Strategy and Governance at ByAllAccounts, emphasized the importance of empowering consumers with greater control over their financial data to support innovation in financial services, advocating for a holistic approach that promotes DEI in financial product design and implementation to ensure the financial well-being of all.

MX published a blog summarizing the ten key themes of the Consumer Financial Protection Bureau’s proposed rulemaking on personal financial data rights, including concerns about the scope of data covered, restrictions on secondary use cases, ambiguity in liability definitions, the potential for charging fees, the need for technical and interface standards, transitioning from screen scraping, consent and authentication protocols, tokenized account numbers, overlaps with existing regulations like Fair Credit Reporting Act and Gramm–Leach–Bliley Act, and concerns about the proposed compliance timeline.

Trustly’s Matt Janiga, Legal Counsel and Director of Regulatory and Public Affairs, published a blog applauding the CFPB’s efforts in advancing Open Banking through Section 1033 of the Dodd-Frank Act, while offering suggestions to improve the proposal for a more inclusive Open Banking ecosystem. Janiga emphasized the need for adjustments in areas such as data-sharing duration to align with consumer expectations, the practicality and security concerns around Tokenized Account Numbers (TANs), the importance of allowing safe, pro-consumer secondary data usage, and enhancing consumer experiences through better API standards and fallback options.

Ozone API was mentioned in The Paypers article for partnering with CLOWD9 to enhance their services to clients, combining Ozone API’s expertise in facilitating Open Banking innovations with CLOWD9’s payments processing platform. The article noted that the collaboration aims to create a comprehensive ecosystem to support banks and financial institutions in adapting to the evolving landscape of Open Finance, promising to foster growth and innovation within the industry.

Events and Submission Deadlines

by ewanrobertson ewanrobertson No Comments

FDATA’s Walter Pereira on Mandatory vs Voluntary Approaches

During 2023, open data regulations in Latin America have significantly evolved, with industry, governments, and financial regulators collaborating to establish a regulated data-sharing infrastructure.

Financial data sharing has been a reality in the financial system since its inception, adapting to a more digital and instantaneous reality as technology progressed. While some Latin American countries are still exploring opportunities and best practices in the open data ecosystem, others such as Brazil, Chile, Colombia, and Mexico have implemented regulated and some case mandatory data-sharing infrastructures. This aims to create a true network effect in the data economy, wherein major financial institutions, typically holding a significant portion of customer data, share this information with third parties.

The region has predominantly taken a mandatory approach for large institutions, and it is anticipated that in the coming years, countries still operating under a market-driven model will also engage in the implementation of regulated infrastructures.

by rebecca rebecca No Comments

FDATA North America Submits Comments to Canada’s Consultation on Strengthening Competition in the Financial Sector

Contact: Laine Williams, (202) 897-4757, [email protected] 

February 28, 2024 Washington, DC – The Financial Data and Technology Association of North America (FDATA) today submitted comments to Canada’s Department of Finance as part of its consultation on strengthening competition in the financial sector. Our submission underscored the necessity for the enactment and realization of several previously announced initiatives that will provide increased competition in Canada’s financial sector once delivered.

FDATA NA’s feedback highlighted four cornerstone initiatives, each critical to fostering a more inclusive, innovative, and competitive financial ecosystem:

  1. Consumer-Driven Finance (CDF): We advocated for the swift advancement of CDF including the pivotal adoption of an open banking regime. This approach is designed to empower consumers and small and medium-sized enterprise (SMEs) with enhanced control over their financial data, serving as a catalyst for broadening the range of financial products and services available. Such a framework is indispensable for stimulating market competition and driving innovation.
  2. Real-Time Rail (RTR): Our comments emphasized the urgent need for the accelerated deployment of the RTR to modernize Canada’s payment infrastructure. This development is key to enabling instant payment processing capabilities that will benefit both consumers and SMEs, thereby encouraging innovation and improving efficiency across the financial sector.
  3. Retail Payment Activities Act (RPAA) Implementation: We stressed the importance of promptly implementing RPAA regulations to cover approximately 2,500 payment service providers (PSPs) within a comprehensive and robust regulatory framework. This initiative aims to significantly enhance the security, efficiency, and competitive nature of Canada’s payment systems.
  4. Canadian Payments Act (CP Act) Amendments: FDATA NA called for essential amendments to the CP Act, allowing regulated non-bank payment providers direct access to Canada’s payment rails. This strategic move is expected to democratize the financial services marketplace, lower transaction costs, and foster a more vibrant and competitive landscape.

Through the enactment and realization of these initiatives, FDATA NA envisions a fundamental transformation within Canada’s financial sector. Leveraging models of success from international jurisdictions, we highlighted the potential of our recommendations to significantly boost the sector’s competitiveness, inclusivity, and innovation. The ultimate beneficiaries of these reforms that will deliver a more competitive financial ecosystem will be consumers, small and medium-sized enterprises, and the broader Canadian economy.

A full copy of the submission is available here.

Top