Data aggregation platform Envestnet | Yodlee announced today that it has come to terms with Charles Schwab on a financial data access agreement. This framework helps Schwab’s clients share their personal financial information with selected services to manage their financial wellness.
What’s going on: The agreement enables Charles Schwab clients to safely and securely share and access their financial data with more than 1,200 third-party financial service providers connected to the Envestnet | Yodlee Platform.
- Schwab clients can expect an overall improved user experience with faster and more reliable access to their personal financial information through the firm’s API .
- Access to client financial data is based on client consent and tokenization, so users don’t have to enter and store usernames or passwords with any third party.
- Envestnet | Yodlee connects to the majority of the top 20 U.S. banks and 43 of the 50 largest wealth management and brokerage firms, enabling a data network associated with tens of millions of consumers who use platform-related personalized apps and services.
“Through the agreement, when a Schwab customer uses an Envestnet | Yodlee powered app or service, they will engage through our proprietary Fastlink service,” said Brian Costello, vice president, data strategy & strategic solutions at Envestnet | Yodlee. “Unlike current methods, the username and password does not leave the Schwab environment. Using this token-based security in the Schwab API, Schwab shares customer requested information with Envestnet | Yodlee who provides secure access to the Schwab customer data through the fintech application or provider.”
“This insures the Envestnet | Yodlee powered app or service only receives the Schwab customer data they need while customers control what’s shared with whom,” he said.
The move away from screen scraping: Banks continue to discourage screen scraping, a tactic widely used by fintech firms and other aggregators that involves taking user credentials to access their financial data.
“API-based connectivity in the United States has gained significant momentum and data-access agreements, like the one we’ve signed with Charles Schwab, are critical to enabling the financial services ecosystem,” said Stuart DePina, president of Envestnet.
- JPMorgan Chase made moves earlier in 2020 to block fintechs from screen scraping.
- Capital One has cut off access at various times to aggregators accessing user information without a data agreement in place.
- This was the third data agreement Envestnet | Yodlee signed in the past eight months with a major U.S. financial institution. Citibank and JP Morgan Chase have signed agreements with the data aggregator.
“These types of agreements further enable innovation to thrive for both financial institutions and fintechs and ultimately, the primary beneficiary is the consumer. As more of these agreements are entered, consumers will be empowered to make better financial decisions while benefiting from even stronger security and site reliability,” said Costello.
“The demand for digital tools that provide hyper-personalized, secure and reliable experiences will only continue to rise for millions of customers as the financial landscape becomes more complex and volatile. All types of financial service providers will benefit.”