South African banks warn customers off new PFM site

South African banks are warning customers not to hand over their login details to a new money management site called 22seven, citing security concerns.

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South African banks warn customers off new PFM site

Editorial

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Based on technology from American vendor Yodlee, 22seven - led by the former CEO of online bank 20twenty - went live this week, using customers' financial data, behavioural science and gamification to help them manage their finances.

However, some of the country's biggest banks have warned customers off the service because it requires them to hand over their online login details.

First National Bank has posted a statement on its Web site cautioning customers against handing over passwords, stating that if they do, they will be liable for any losses. Absa has put out a similar warning, adding it will roll out its own PFM features this year.

In response, 22seven has taken to Twitter to insist that its platform is safe and secure, reminding followers that Yodlee is used by many of the biggest banks in the US. On its Web site, the start-up says it does not access customer details at all, only Yodlee does, over an encrypted connection.

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Comments: (1)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

I've heard of a leading bank in Canada doing the same thing a year ago, and have always wondered why American banks haven't followed suit or, for that matter, led the trend. Isn't it a part of standard bank account contracts that access credentials are confidential to the accountholder and cannot be handed over to third-parties? It should hardly matter that such third parties pass through all the info to Yodlee or protect them securely. The popularity of Mint, Offermatic and other services shows that, despite everything, there are enough people willing to throw caution to the winds if they stand to gain something in return. If consumer behavior in the context of PFMs is any indication, security concerns are grossly exaggerated and any steps to enhance security (e.g. 2FA) at the cost of increasing friction will stunt adoption of financial products.  

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