By Kevin Hughes, Connectivity & Information Services, Fiserv
Using information to enhance consumers' experiences and earn their loyalty
Aggregating data from a broad range of sources is critical to enhancing the consumer experience and providing the most innovative offerings. And offering new data sources, such as crypto assets, is becoming a differentiator among aggregators. Finding the right data aggregation solutions and providers requires clear alignment between their capabilities and business objectives.
Through partnerships with banks and other financial institutions, data aggregation platforms add a critical access layer. They are “facilitators,” each with purpose-built technology to rapidly and reliably supply data as consumer demand for apps beyond traditional banking grows. Platforms each offer unique strengths. Platform providers differentiate themselves in everything from their relationships with FIs to the mechanics of data structure. They vary in privacy controls and data use, too. These differences and others underscore the importance of intelligent evaluation when selecting a platform partner.
Financial institutions and technology firms may choose from various methods and platforms for aggregating data. For implementation, three factors define success: reliability, adaptability, and security.
1. Reliability
Reliability refers to a platform’s ability to maintain continuous, live connections to data sources and to correctly extract data. Reliability is the foundation for building a successful data aggregation platform. For example, when borrowers fill out mortgage applications, the right infrastructure should be in place to quickly and accurately access their data and verify assets to prompt next steps in the application process. Instead of chasing down paper documents, financial institutions can use data aggregation to automatically pull existing digital information.
Data reliability shortcomings are the death knell for financial apps. If the complete picture of customers’ information requires multiple interactions or is interrupted by incomplete data pulls, then higher abandonment and churn will follow.
To help ensure reliability, a data aggregation platform should have the infrastructure to:
- Ensure data requests are processed quickly and seamlessly
- Update and repair connections quickly
- Solve problems in real time
As technology facilitates more personalized offerings, quickly adapting to evolving needs and supporting additional business models is paramount.
2. Adaptability
Financial institutions and technology providers need data to be more adaptable in response to changing consumer needs. Adaptability means that a platform provider, working with its sources, can rapidly adjust the structured data provided to its customers’ needs.
As technology facilitates more personalized offerings, quickly adapting to evolving needs and supporting additional business models is paramount. Depending on the financial institution or technology firm, that could mean implementing new data elements or enhancing API structures.
Adapting to new offerings -- and quickly implementing them -- is key, as is partnering with a data aggregator to expedite new offerings. Data needs to available in weeks, not months; any implementation delay will shorten the market differentiation offered by new, exciting features.
Key takeaways regarding adaptability considerations include:
- Business models change; ensure that a platform can quickly expand the range and type of available data
- New apps and data insights reflect a platform providers commitment to innovation
- Are fintechs viewed as partners or is every service an upcharge?
3. Security
The protection of data by the integration platform on behalf of its data users and sources is a fundamental concern. In periods of disruption, such as the ongoing COVID-19 pandemic, concern heightens as consumers increasingly rely on digital applications to complete financial transactions.
Cybercriminals continually devise new methods to access and exploit data, which is generally more secure when it's actively protected by the same partner providing the aggregation platform. As handoffs and exchanges of data occur, the possibility of data being intercepted or corrupted can increase. For compliance and security, it's important to work with a data aggregator that will not sell consumers' data and uses only consumer-permissioned data for your application.
Loss of data and any activity that compromises information are the largest threats to a company's reputation and viability. Enlisting a partner with wide-ranging experience in the financial industry and extensive data-warehousing capabilities helps ensure a better understanding of an organization's unique business environment, including the many regulations that protect consumer data.
For fintechs, an aggregator’s security approach matters for two key reasons. First, any data loss poses significant reputational threat. Second, data connectivity relies on the FI’s comfort with an aggregator’s security. For fintechs, an aggregator’s security approach matters for two key reasons. First, any data loss poses significant reputational threat. Second, data connectivity relies on the FI’s comfort with an aggregator’s security.
Financial institutions and technology firms should ask data aggregators several important questions regarding their security protocols:
- How is your data protected and stored? What methodologies are used?
- What are your data retention policies and what happens to the data when a customer terminates or deletes an account?
- How is data transmitted?
- Is your annual System and Organization Controls (SOC) report available for clients to review?
4. Changing Regulatory Environment
With anticipated commentary from the CFPB, the expectation is that there will be an emphasis on the open and free access by consumers to data that they own. There are many organizations who take action to block aggregation activity whether due to security concerns or infrastructure issues. The CFPB is expected to recommend that organizations make efforts to move to standardized structures and data formats, with the ultimate goal to remove credentials from the marketplace.
Considering these anticipated directives, it becomes increasingly important to understand the source of data connection requests, the purpose of the connection, and the protocols that exist to protect and secure that data as well as any customer information.
Meeting expectations, earning loyalty
Fast, clean, and wide-reaching data access drive innovations. For fintechs pulling consumer or SMB financial data, understanding the extent of these in a platform is critical. So too is understanding security and compliance as the stakes around consumer data handling grow.
In a competitive market, the proficiency with which financial institutions and technology firms obtain data can determine how consumers view their solutions.
Working with a partner that can reliably aggregate data with built-in adaptability and security will help organizations stay ahead of technological advances. That assistance can provide durable financial applications to help enhance consumers' experiences and earn their long-term loyalty.