A host of US fintech firms - including Betterment, Kabbage and Ripple - have set up an industry group to push for consumers' rights to share their bank financial data with third parties.
Backed by Affirm, Envestnet | Yodlee, and Varo Money, the Consumer Financial Data Rights (CFDR) coalition says that Under Dodd-Frank, Americans now have the right to access their personal financial data through technology-powered third party platforms.
Banks have been reluctant to provide access to data to upstart competitors and say that the practice of customers giving third parties the ability to login to their accounts for this purpose poses a security risk.
The CFDR group is pushing for data access via a different route - application program interfaces (APIs). It is calling for the US to follow in the footsteps of the UK, which is moving to an Open Banking standard, and Singapore which is promising an open API.
The new lobbying group says it is committed to "improving dialogue" throughout the FS industry and working with banks.
Its first action is a joint comment letter in response to an advanced notice of proposed rulemaking on Enhanced Cyber Risk Management Standards issued by the Federal Reserve, OCC and FDIC. The letter calls on regulators to establish a hierarchy with regard to cybersecurity risk, "noting the importance of continuing to allow consumers to access tools that enable their financial well-being".
Says Rob Frohwein, co-Founder, Kabbage: "The ability to freely access financial data empowers customers to take actions to improve their financial lives, whether it's accessing capital to grow a business or better understanding their income streams. Access to financial data is not just vital for customers wanting to enjoy financial health, but it also allows companies to provide better user experiences."