Mercator Advisory Group predicts that many financial institutions (FIs) will start to review current data management techniques this year in order to address the new privacy and open banking regulations. In addition, Mercator predicts that FIs will also seek to enable better data analytics and data monetization. This article from PaymentsSource suggests areas that should be developed to prepare for third party data sharing:
“Consumer financial empowerment relies on the right to access, share and control personal data. But ecosystem players, from financial institutions to data agents to fintechs, must work together to provide consumers access, control, transparency and traceability:
Enable customers to share their data securely with third parties. Consumer data resides in a variety of locations, including banking, payroll, tax, insurance and investment apps and services. Industry-led coalitions like the Financial Data Exchange (FDX) are essential to realizing the vision of a simple, comprehensive and secure data sharing ecosystem.
Provide visibility and control for customers to manage data access partners. Consumers should be able to easily view which parties have access to their financial information and how they use it. Additionally, opting in and out of data sharing should be as simple as clicking a button. Fortunately, we’re starting to see some data providers (such as banks) provide dashboards for their customers. But these controls must continue to evolve to ensure a simplified and streamlined process for consumers.
Position data-sharing details front and center. Key elements of data permissioning should be made immediately and explicitly clear as soon as a new consumer engages with an app or service. Sixty-three percent of Americans say they understand very little or nothing at all about data privacy laws and regulations. Information on data rights should be comprehensive yet concise — not buried in the dense terminology of service agreements or hidden in website privacy policies. Use plain language, avoid complex jargon and simplify data concepts, where possible.
Ultimately, every financial institution and fintech aims to help its customers succeed financially. And with access to their personal data and control over how they can use it, consumers are able to make more informed financial decisions. A more open and inclusive financial system enables everyone to improve their financial health.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
