Advice for safeguarding financial data

By Nelson Santiago

FinTech tools (apps and platforms) can help consumers make payments, invest, budget, save money, and view their financial “big picture” at a glance. However, as Consumer Action points out in its educational materials, it’s important to understand how the tools work before starting to use them. Depending on the app, financial institution, and other players in the FinTech ecosystem, consumers may not be aware of the amount of data they're sharing, the potential risks to their privacy, and how current and future regulations might (or might not) protect them.

INSIDER readers who missed the webinars can tune in to our YouTube channel to view the recordings.

The October “Share Financial Data with Care” webinar was a virtual policy briefing geared toward consumer advocates and legislative staff. Sponsored by The Clearing House (TCH) and moderated by Consumer Action's director of national priorities, Linda Sherry, the briefing featured three dynamic presenters. Rob Hunter, deputy general counsel at The Clearing House, presented TCH's research on consumer attitudes on data sharing. Hunter described how the research shows that, while consumers feel confident and secure when using financial apps, they actually don't know very much about what's happening behind the scenes and may lack understanding of the terms and conditions they’ve agreed to.

Stuart Rubinstein, CEO of Akoya, focused his remarks on what the financial services industry is doing to ensure the safety and security of financial data access. He described how data aggregators, FinTechs and financial institutions can integrate with the Akoya data access network to securely exchange financial data without Akoya obtaining or storing consumer banking credentials.

The presentations were rounded out by Dan Murphy, policy manager with the Financial Health Network (FHN), who discussed FHN's research report “Financial Data: The Consumer Perspective.” One interesting finding Murphy shared was that approximately 90% of consumers are in favor of an opt-in standard for data sharing, whether it's from banks, tech companies or FinTech apps. To view the recording of the webinar, click here.

The November webinar—“The Role of Data Networks in the FinTech Ecosystem”—was designed for community educators and advocates, to help them understand the role of data networks in the FinTech ecosystem. Sponsored by Plaid, it, too, featured three expert speakers, with FHN’s Murphy making an encore appearance and focusing a portion of his presentation on federal consumer protections. Murphy discussed a proposed rulemaking by the Consumer Financial Protection Bureau (CFPB) under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. He explained how the law interacts with pre-existing statutes and regulations, such as the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, and the Electronic Fund Transfer Act (EFTA).

Plaid's Ben White, who works in research and advocacy, shared data from a recent Plaid survey about FinTech use by U.S. consumers and discussed how Plaid and other data networks help ensure financial data privacy and security. Survey results shared by White showed that 81% of consumers said that FinTech apps give them more control over their finances; nearly 8 in 10 said that FinTech seamlessly integrates into their everyday lives; and 73% said FinTech makes them feel more empowered.

A key theme running through the presentation by Sean Creehan, senior FinTech risk and policy advisor with the Federal Reserve Bank of San Francisco, was that data use creates both opportunities and risks for financial services providers and necessitates new ways of informing and protecting consumers. Creehan's talk focused on transparency, business responsibility, consumer control, where we are in terms of policy and regulation and where we may need to go, and the challenges and complexity around these issues.

To view the recording of the “The Role of Data Networks in the FinTech Ecosystem” webinar on Consumer Action’s YouTube channel, click here.