Two-thirds of consumers who use nonbank fintech apps are extremely concerned or very concerned about data privacy, according to a recent survey conducted for the Clearing House. A majority of these fintech users (which account for nearly one-third of U.S. bank customers) said they were uncomfortable with the fintech app providers accessing their Social Security numbers, biometric records, bank account number and bank username and password.
However, they were less willing to act on their concerns, with just 22 percent of fintech users saying they would not consent to giving up their credentials, even it if meant they could not use a particular app. When informed that some fintech apps access financial data for purposes beyond the use of the app, 47 percent of respondents said they were less likely to use nonbank fintech apps. The remainder said it did not make a difference or that they would be more likely to use them.
In line with numerous other surveys, consumers viewed banks as the most trustworthy steward of financial data. More than six in 10 said that their primary bank was best able to keep their data safe, compared to 21 percent for financial aggregators. Many of these aggregators’ apps use and store customers’ bank login credentials for access to account information, a practice known as “screen scraping.” Some banks have been developing APIs that permit customers to authorize third parties to access their account information without requiring customers to give up their credentials.