Consumers need better information about what happens when they share bank account credentials with third-party financial aggregators, Federal Reserve Governor Lael Brainard said today at a fintech conference. She emphasized that consumers, banks, aggregators and regulators all have a role in developing common standards for how customer data is shared and protected.
“There’s an increasing recognition that consumers need better information about the terms of their relationships with aggregators, more control over what is shared, and the ability to terminate the relationship,” Brainard said. “Consumers should have relatively simple means of being able to consent to what data are being shared and at what frequency. And consumers should be able to stop data sharing and request the deletion of data that have been stored.”
Brainard’s emphasis on jointly developed standards that balance access and protection for all participants aligns with the American Bankers Association’s views that industry-led technological solutions will be more beneficial than top-down regulatory mandates. “We recognize the importance of working together and the potential to draw upon existing policies, norms, and principles from other spaces,” she said. ABA has been engaged for over a year with banks, regulators and nonbank fintech firms on consumer data access and “screen scraping,” a process in which consumers provide their online banking credentials to a third-party app or tool. For more information, contact ABA’s Rob Morgan.