Fintech is going mainstream. Ten years ago smartphones barely existed. In contrast, today over 100 million consumers rely on digital financial services to manage their daily lives.
Some examples: EarnUp optimizes how consumers manage their debt so that they can save money; the average EarnUp customer saves $20,000 in mortgage interest payments. Even partners with Walmart to help more than 200,000 Walmart associates avoid falling into debt. And Venmo, a perennial Millennial favorite, processes over $10B a quarter with its “social payments” functionality.
This growth comes with responsibility. The entire fintech ecosystem depends on technologies that help consumers digitally access their financial data. Without data access technologies and platforms, the product choice and improvements to financial wellness that consumers now enjoy would no longer exist. The benefits that data access technologies enable underscores the need to protect it - and one of the most important ways of doing that is through responsible stewardship of personal data.
Earlier this month, the U.S. Department of Treasury released a thoughtful and comprehensive report on nonbank financials, fintech, and innovation. The report recognizes the critical role data portability plays within financial innovation, and affirms our government’s commitment to promote secure and reliable financial data access. It makes many important observations, including:
- Continued improvements in data access reliability can continue to generate significant benefits for consumers
- Regulators can do more to recognize the benefits of consumer access to financial data and to facilitate this kind of access
- Triangulating between security, access/user experience, and consumer consent can form the basis for a responsible data access framework
Treasury leaders must now rely on their colleagues within both the executive and legislative branches to bring these recommendations to life. But we in the financial services and fintech industries should also see this as a call to action. We have an opportunity to forge and advocate for a path forward that preserves consumers’ fundamental right to access the best financial technology, while also being committed to preserving the safety and security of that data.
It is important to note that data access platforms like Plaid play a unique role to play in exercising responsible stewardship of financial data. Because platforms serve as the backbone on which the fintech industry is built, the implicit guidelines and explicit rules set by platforms often become “the way things are done.” Technology can make data access possible; platforms can require that it be done responsibly and securely, and within a robust framework of consumer consent.
While the daily headlines can sometimes make it hard to imagine consensus-building and constructive collaboration are still possible, we have a rare opportunity to define a clear win for consumers, regulators, and innovators. The Treasury report has set the stage in Washington and beyond for a closer look at the issues at the heart of the financial data debate. Let’s seize this unique opportunity to work together to ensure that our country’s financial technology ecosystem continues to evolve in a way that is consumer-first.