Wells Fargo is trying to establish itself as the leader of a movement to give banks’ customers control over their data and how it’s used.
The first step, according to Brett Pitts, head of digital for Wells Fargo Virtual Channels, is to come up with cross-industry standards for moving data to different parties.
“This will be successful if more banks, more aggregators, more fintech firms wind up signing into these kinds of agreements, and figure out an open standard way of passing data and keeping customers at the center of discussions,” Pitts said of its data-exchange agreement with data aggregator Finicity, announced earlier this week. “Ultimately, this isn't going to work if its just Wells Fargo, Intuit and Finicity doing it.”
The agreement allows Wells Fargo to share its customer data with Finicity using application programming interfaces. The bank made similar agreements with Intuit, which owns QuickBooks, TurboTax and Mint, in February and with Xero last summer. This week’s agreement is different in that it allows Wells to move data to third-party fintech apps that work with Finicity, whereas the agreements with Intuit and Xero allow them to use customer data on their own financial applications.
Right now the most common way of accessing customer data is through a method called screen scraping: customers log into the third party site or app with their bank credentials and that company “scrapes” the information to be able to log in as the customer to retrieve account data as necessary.
“Screen scraping is the anti-pattern we want to stop,” said Pam Dingle, principal technical architect at Ping Identity, a maker of identity management software. “By sharing their passwords, customers are allowing the third parties to be them – transfer money, take out loans, literally do everything the customer can do. These passwords are stored in a format which allows them to be used, so a breach at the third party is a breach of the bank account.”
Intuit also established a data sharing agreement with JPMorgan Chase in January; in February Silicon Valley Bank and Xero made a similar move. Wells’ arrangement with Finicity is the third such agreement, but Pitts indicated the bank doesn't plan to stop there.
“We have lots of these kinds of conversations in the pipeline right now,” Pitts said. “Early on it’s important for Wells that we show leadership, that this is possible, that we build momentum through these kinds of agreements and they're used as a catalyst for creating an industry standard ways of doing things. We’re hoping this can constitute a sort of tipping point.”
When Wells Fargo announced its agreement with Xero it framed it as one that takes a stand against the more common practice of screen scraping. Its progress in establishing more agreements with more data companies has “felt a little bit slower than what we would have liked” because of the variety of business models among various aggregators, Pitts said.
Now Wells is hoping over time its campaign to end screen scraping becomes better understood and more easily replicable by others, by making sure its different arrangements can have have as many common elements as possible on the technology side, Pitts said.
“The strategy is to really provide quality access and quality data for consumers financial records,” said Finicity CEO Steve Smith, “to digitize and speed up the existing process thats been out there for a long time and enable speed, security and convenience of financial records.”