CFPB signals next steps on consumer data access
Comments from the agency underscore the importance of safe and secure data access—and the cooperation required of the entire ecosystem to facilitate it
The public inquiry follows a lot of recent activity on this issue, including a CFSI white paper, comments by CFPB Director Richard Cordray, and Plaid’s own white papers. The importance of data access for promoting financial wellbeing underscores all these comments.
Access to digital financial records is critical. As with your student records or medical records, your financial records tell an important story about you. With health care, for example, if you are able to see your records, it is easier to participate in your care and treatment. You can review what you were told, ask tough questions, and consider other options. You can be a better advocate for yourself. The same can be said for your financial records. This is all about taking control and becoming a more active participant in your own financial life.
Specifically, Director Cordray requested the public’s perspective to inform the Bureau’s understanding around:
- how to preserve consumer access
- ensuring that access is safe and secure
- protecting consumer control and transparency
Significant progress has already been made on a number of these issues. For example, most stakeholders in financial services would agree that consumers’ right to control access to financial data in a safe and secure manner must be protected. As such, conversation among stakeholders has shifted to how exactly to support such access. There’s plenty of work to do on this front, not least because the United States has a diverse landscape of financial institutions with differing technology stacks and requirements.
Despite this diversity, however, leadership by financial institutions will be necessary in order to address one of the more complex questions the CFPB raised: how to provide consumers with appropriate control and transparency. Addressing this question presents an opportunity for financial institutions to cement consumer loyalty by acting as the hub for their customers’ digital financial lives.
For example, according to a recent Plaid consumer study, 80 percent of respondents indicated that they would like their banks to provide this visibility and control by enabling a dashboard for them to track and manage financial apps.
Banks are well positioned to take a leadership role in the evolution of the financial services ecosystem—and maintain their position at the heart of it—by embracing a role that helps consumers manage their relationships with various fintech services.
To be sure, work on this and the other issues raised by the CFPB will be challenging, requiring close cooperation across key industry stakeholders. But if these early days of digital finance are any indication, the potential benefits to consumers make such concerted efforts worthwhile.
In the meantime, the CFPB has asked consumers and developers to share perspectives on how financial data access affects their lives and products. These are voices less often heard but important for the CFPB to adopt a holistic perspective.
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