There may not be an Open Banking mandate in the U.S., but that doesn’t mean the payments and financial services market isn’t embracing data sharing and integration.
The Clearing House took a significant step toward advancing the U.S.’ adoption of an Open Banking framework this week, announcing an initiative aimed at connecting FinTech firms to users’ financial data — in a data sharing agreement between The Clearing House, its 25 financial institution owners and FinTech firms. According to reports, banks are looking for alternatives to the traditional data aggregation tactic of screen scraping, which requires users of financial services platforms to provide their usernames and passwords to their online banking accounts to share financial information with that platform.
In a statement, The Clearing House Executive Vice President of Product Development and Management Dave Fortney said that this strategy may have security implications, because once financial data leaves the bank, it is held by that FinTech, and “it’s really their responsibility to protect it. They’re the only ones that have control over that information at that point.”