Finicity is part of the Mastercard family. Our open banking platform provides the financial data you need.

Jack Henry™ (Nasdaq: JKHY) announced an expansion of its existing relationship with Mastercard® that will enable credit unions and banks to provide their accountholders the ability to securely see all of their financial accounts – within and outside their primary financial institution – in one place. Together, the companies establish a partnership that makes secure, API-based data-gathering affordable for community and regional financial institutions.

Through this collaboration, financial institutions can offer their accountholders secure access to external providers and financial data — consolidating, categorizing and enriching that data in a simplified digital experience.

Read more about this expanded partnership here.

Getting a mortgage has traditionally been a long and challenging process. Customers have had to dig up paystubs and bank statements to hand off to loan officers. Loan officers and processors then manually uploaded the paperwork into the lender’s database for review and then hope for the best. When a borrower sent an incomplete document or a processor made an error in data transposition, it could delay the loan approval process by days, even weeks.

But in today’s climate of rising interest rates and low inventory, those long wait times have gone from just annoying to potentially costing house hunters the chance to close on the homes they desire. For example, serious buyers should arrive at each showing with a pre-approval letter in hand, in order to be competitive. Even those just browsing will need to move quickly if the right house comes up. And those refinancing—yes, even as rates are climbing, there are borrowers who could save by refinancing—must act fast to nail the lower rate in place.

These inefficiencies and delays were troubling to Guaranteed Rate, who, as the second-largest retail lender in the U.S., has been helping to make the mortgage process easier since 2000.

Two years ago the company decided to look into taking its underwriting process digital. There was a lot on the line. The mortgage industry sets a high bar for the financial data used to underwrite loans, requiring documents from verified institutions. What’s more, borrowers share some of their most sensitive financial information to secure a loan. Guaranteed Rate was committed to protecting the consumer’s privacy and financial data.

What Guaranteed Rate came up with is a platform that enables customers to go online or use a mobile app to grant permission for the lender via a third-party service to access their financial and payroll accounts. That lets the lender quickly and accurately verify assets, income and employment.

If everything checks out, the lender can give the borrower a quick thumbs-up. In some cases, that’s all the data the lender needs for the mortgage to go forward. This digital verification process can cut up to eight days off the underwriting process. “From an efficiency standpoint, our underwriters don’t have to manually verify income and assets for every loan, so we can scale up,” says Brad Lando, Senior Vice President of Strategic Development, Guaranteed Rate.

The company protects borrowers’ sensitive data by using Mastercard’s open banking platform. When a borrower grants a lender access to their data, Mastercard’s technology issues a token. The token allows the lender to see the data, but never house it. Nor does the lender receive login credentials. The risk of those credentials being hacked during the mortgage process is reduced, and the customer gets a better experience.

Another advantage is that borrowers can grant ongoing account access for prolonged periods of time, such as 60 days. That means the lender can refresh the data as needed without having to go back and ask for renewed permission to track down more documents, alleviating the burden on the consumer. “It’s cut down on risk, in addition to bringing a better customer experience,” says Lando.

Loan officers and processors have been quick to adapt to this digital-first method. The automated verification system allows them to sign off faster on more straightforward loans, which frees them up to focus on the more complicated ones.

And while there’s still some trepidation among consumers, they’re also starting to see the benefits. When offered a choice to manually upload their documents or grant permission for the lender to pull their information, 83% of borrowers who chose the digital path said their loan processing time was shorter than they expected it to be, or that it met their expectations.

As digital verification becomes more prevalent, the mortgage process will speed up, from application to close. And that means more people can look forward to a smoother process on the way to landing in the homes they want to live in.

Open banking can help build an economy that works for everyone. Data is at the heart of every financial experience, from lending to money management to payments and beyond. It can also help the under-banked or those with thin or no credit files by providing easier access to financial services.

New payment options have emerged as money has become increasingly a digital or data-driven experience, and they are only expected to become more popular in the coming years.

Jess Turner, Executive Vice President of Global Open Banking and API at Mastercard talks payment choice and optimized digital experiences at American Banker.

Consumers are embracing digital payments and turning to fintech for everyday finance needs. According to Mastercard’s 2022 Global New Payments Index, emerging payment methods like account-to-account payments, digital wallets and Buy Now, Pay Later are all on the rise. Eighty-five percent of consumers have used a digital payment method within the last year. And 93% are likely to use a digital payment method in the coming year.

Many of these emerging digital payments are powered by open banking and are a natural progression of the shifting landscape of payments. Through our latest research, we wanted to share five key trends to consider when integrating digital payments into your fintech innovation.

1. Consumers want convenience when paying bills

Consumers across the globe are relying on digital channels for paying bills because it is more convenient and makes it easier to manage finances.

Subscriptions, bills, utilities, loan repayment and retail payments are more convenient with open banking-powered apps and services. Eighty-one percent of consumers have already heard of account-to-account payments, but they may not know that open banking added speed and convenience to A2A, or that A2A payments can now be made at the point of sale, without typing in card details or writing checks.

2. Consumers seek flexibility in making payments

The majority of global consumers want the flexibility and control to optimize digital payments. Similar to the motivations around bill pay, consumers are connecting their accounts to automate repayment for BNPL and installment loans. Fifty-eight percent of consumers are open to connecting their bank account to other financial services to enable automatic repayments, and 52% percent say that they use digital repayment tools because they help to prevent missed or late payments.

3. Security is top of mind

Consumers recognize the convenience that digital payments offer, and security remains a top concern, highlighting an opportunity for providers to build trust. Building comfort with emerging digital payments is key to supporting future adoption as the two trend together. Faster transactions, convenience and transparency are the top reasons that help consumers overcome security concerns.

4. Consumers rely on fintech to manage finances

Consumers are relying on fintech, and indirectly open banking, to accomplish everyday financial tasks. Eighty-three percent of consumers have used digital tools for at least one financial task, and over half use technology to accomplish five or more tasks. The majority see making a payment as the most beneficial use case.

5. Emerging payments are strongest among Gen Z and Millennials

Younger generations have gone more digital in their purchasing and payments behavior globally and it’s anticipated that their use will continue to increase. These generations are less likely to make in-person purchases and payments: 50% for Gen Z compared to 78% of Boomers. They are also less likely to use cash for purchases. While security remains a concern for them, it is less heightened than for older audiences.

Building the Future of Payment Choice at Mastercard

At Mastercard, we have always powered experiences that enable customer choice. Our solutions are built to meet consumers’ financial needs and designed with security at the center.

In recent years, we have further differentiated Mastercard in the market by diversifying beyond the card. We’ve built a complementary open banking platform that enables ACH and account-based payments with best-in-class capabilities across infrastructure, applications and services. Empowering people to pay and get paid using a card, bank account, cryptocurrency, or even cash. Using any device or no device. In real-time or later, truly empowering people with flexibility and control.

Click here to download the full Global New Payments Index for a deep dive into emerging payment areas including digital payments, account-to-account, cryptocurrency, open banking and BNPL, among others. 

Certain open banking solutions are provided by Finicity Corporation, a Mastercard company.

Digital financial experiences are becoming central to our lives. In a recent Mastercard poll, eight in 10 U.S. consumers reported using technology for financial tasks like paying bills, sending money to friends, checking or improving credit scores or applying for loans.

These are not mere conveniences, but tools that meaningfully impact people’s lives, providing them with more choice in financial services and more opportunities than ever before. Many of these innovations are made possible by open banking — technology that allows consumers and small businesses to permission their financial accounts’ data to the financial apps and services they want to use.

As digital payments continue to increase exponentially, so will the flow of financial data between parties. The massive increase in digital financial experiences is underway, according to Mastercard’s Rise of Open Banking report, 93% of US consumers currently using technology to manage their money. Security is more important than ever and, to ensure privacy, consumers want transparency and more control.

Mastercard improves security through open banking by driving new technology innovation while meeting governmental regulations and helping to establish industry standards.

Trusted financial data aggregation platforms, such as Mastercard’s open banking, facilitate secure access to consumers’ permissioned data via traditional connections and APIs. However, there are additional technological and regulatory measures at work that add more layers of protection to consumers and small businesses alike. 

Here are some of the ways open banking keeps your customers’ financial data secure:

Tokenized Access

The industry is rapidly moving toward “tokenized” access. Also known as “Open Authorization” or “oAuth” connections, “tokenized” access involves providing an open banking platform with a “token” that is used as an access key rather than account credentials to access consumer-permissioned financial data.

Regulatory Movement

Across the globe, government regulations of consumer technology have emerged to protect people’s data from leaks, fraud or loss. For example, in the U.K. and Europe payment service providers must register with the Financial Conduct Authority to provide certain open banking services. Only registered providers can access consumer bank accounts, and they require explicit consent from consumers.

Meanwhile, new technological advances are accompanying Open Banking regulations to further protect consumers and provide clear boundaries for innovators. For instance, a crucial component of Europe’s PSD2 regulation is Strong Customer Authentication (SCA), a tool that guarantees user ID verification. As a stronger form of multi-factor authentication, SCA requires that customers share something they know (i.e. password or PIN), something they own (their mobile phone’s unique identity) and a biometric (facial profile or fingerprint). SCA will not authorize a payment without two of these three factors.

There are also regulations being worked on in other regions.

Industry-Driven Technology Standards

Establishing common industry standards around security will also help open banking to more clearly define access and sharing of financial data. In North America, a cross-section of banks, fintechs and financial services groups have come together to form Financial Data Exchange (FDX), a nonprofit aligned around a single data-sharing standard entitled FDX API. As an interoperable and royalty-free standard, the FDX API could accelerate the adoption of open banking API frameworks.

FDX adheres to five key principles for data sharing – control, access, transparency, traceability and security. Taken together, these five principles prescribe how consumers can be empowered and protected via data sharing by giving them a better view into what is happening with their data, who is accessing their data and what consumers are getting from their data.

Data Access

To protect the security of customers’ data, Mastercard, through its wholly owned subsidiary, Finicity, takes additional steps. In the United States, Mastercard has direct bilateral agreements for data access with most of the largest financial institutions. Our open banking platform is guided by our data responsibility principles.

When choosing an open banking platform for your fintech innovation needs, security is an important consideration.Our focus on building trust, stewarding data and driving choice have and will continue to drive how Mastercard looks to the future.

To learn more about open banking and how security is at the center of its design, download our whitepaper.

Mastercard today announced an expansion of its Engage partner network to include its open banking services, offering customers easy access to several technology partners that can quickly build and deploy open banking solutions for payments and lending decisioning at scale. According to Mastercard’s 2022 New Payment Index, 83% of consumers globally use digital tools for at least one financial task, and more than half use technology for five or more tasks. With the rapid adoption of open banking (i.e., consumer-permissioned data access) and digital tools across financial services experiences, Mastercard will work with technology partners to spur innovation through access to its open banking platform, from lending to payments to financial management.

“The partners joining Mastercard Engage are leading the deployment of open banking solutions that are designed with security at the center and will help to meet consumers’ financial needs and enable choice,” said Jess Turner, executive vice president, Global Open Banking and API at Mastercard. “Together we can enable innovation that will increase financial inclusion and expand access to digital services across the globe.”

Find out more about the initial partners and open banking solutions in the Engage program here.

In the evolving world of open banking, it’s easy for businesses to get lost in the endless possibilities. Who do we partner with to provide services at scale? How do we make it easier and faster for our fintech, merchant and lender partners to use our services? What is the most effective way to deploy the power of open banking? Mastercard today announced an expansion of its Engage partner network to help businesses decide who they can count on for technology integration of open banking services. We connect platform providers and ecosystem partners and help them provide open banking services at scale, making it easier and faster for fintech, merchant and lender clients to utilize consumer-permissioned data to offer new and improved financial services.

The Engage network offers businesses easy access to financial technology partners that can quickly build and deploy open banking services for payments and lending decisioning use cases at scale. The initial partners to join Mastercard Engage for open banking include Dwolla, FinTech Automation, i2c, Link Financial Technologies, LoanPro, Nova Credit, Provenir, Synctera, Tern and Usio, Inc.

Through this new program, these providers benefit from fewer contracts, faster access to customers, data security and access and overall flexibility to better leverage Mastercard’s robust open banking services.  

Mastercard has a long-standing track record of working with technology and fintech partners to build the future of financial services and enable more choices for consumers. With three billion cardholders and 93 million merchants, the more partners Mastercard has, the more powerful the flywheel of our network becomes. Since 2018, nearly 150 partners around the world have joined the Mastercard Engage program. In the last year alone, nearly 100 Engage partners have helped their customers deploy new, innovative solutions on more than 250 million accounts with Mastercard digital services, including all-digital consumer payments experiences, tokenization, digital wallet, mobile POS solutions and now, open banking. 

Implementation Choices to Fit Your Needs

Open banking through Mastercard and its technology partners allows businesses to establish direct consumer-permissioned connections with their customers’ bank accounts. Through these consumer-permissioned connections, businesses can verify accounts for payments and payouts, check balances to reduce payment failures, and cut fraud by confirming bank account ownership. This has improved the payment experience for both the businesses and their customers.

Similarly for lending, borrowers can directly permission data and insights through the ecosystem to support their lending decisioning processes. This also means a better lending experience for both the lender and borrower, as it provides financial insights, expanded data sets not available through paper submissions, increased financial inclusion, and a simplified experience. 

The Engage program provides two implementation options for open banking technology integration partners. The first two offerings are Partner Linked and Partner Direct. These methods provide a seamless and secure implementation of consumer-permissioned data through Mastercard’s open banking platform and can be used together or separately, depending on the preference of the financial technology provider.

Partner Linked provides broad ecosystem access, allowing business clients to quickly begin using the solutions through their preferred platform partner. This integration is an agreement with a partner and a direct agreement with the business. Engage partners can integrate to Finicity, Mastercard’s wholly-owned subsidiary with a customer-supplied access key, shielding their businesses from needing to handle user credentials. This method provides simple integration for our partners and the business contracts directly with Finicity.

Partner Direct is a reseller agreement that allows for greater customization than the Partner Linked integration, and direct access to provide business clients with a single integration for all open banking data, lending and/or payment services. Partners can directly embed and/or resell Mastercard open banking services and offer a customized experience for their business customers, wrapping additional value-added services around Mastercard’s open banking platform.

As an Engage technology partner, you can expect:   

Some Mastercard open banking services are delivered through Mastercard’s wholly -owned subsidiary, Finicity Corporation. Open banking services through the Engage program are launching with U.S. partners today with plans to expand globally.

Visit the Mastercard Engage website for more information, or schedule a meeting with one of our integration experts to learn more.

Certain open banking solutions are provided by Finicity, a Mastercard company.

Revised July 1, 2022

This week, Freddie Mac announced the latest Loan Product Advisor® (LPASM) enhancement that includes on-time rent payments as part of the company’s purchase determinations.

Mastercard, a designated third-party service provider for Freddie Mac, is excited to provide two reports for lenders that include rent payment history.

Our Mortgage Verification Services (MVS) product provides the consumer-permissioned data necessary for LPA’s rent payment history credit assessment with no setup required for the lender. If you’re already using an MVS asset report, you will automatically send the data necessary for a rent assessment.

Mastercard’s open banking platform (provided by Mastercard’s wholly-owned subsidiary, Finicity), is a designated service provider that offers a digital, single-vendor solution for assets, income and employment through both Freddie Mac and Fannie Mae. By automating the asset and income assessment process, we can also provide transaction data for rent payment history, direct deposits and 10-day pre-closing reports for employment verification. These solutions help to streamline lenders’ loan approval process and increase homeownership opportunities to qualified borrowers.

Rent Payment History in Lender Credit Decisioning

By virtue of sheer numbers, millennials are defining the trends of today’s housing market. The age group now accounts for 43% of all homebuyers so far in 2022, according to a new report by the National Association of Realtors. With approximately one-third of this demographic being credit invisible, there’s an opportunity to incorporate additional data sources to help establish creditworthiness and the ability to repay the loan. The integration of rent payment history into the mortgage lending process can be helpful to first-time homebuyers who have a strong track record of on-time rent payments, creating a new path to homeownership while still promoting safe lending.

In addition to this week’s announcement from Freddie Mac, Fannie Mae has included rent payments in their automated mortgage credit decisioning process in Desktop Underwriter® (DU®) since September 18, 2021. Fannie Mae identified recurring rent payments in bank statements and transaction data as a factor which could deliver a more inclusive credit assessment.

Fannie Mae said 17% of applicants who have not owned a home in the last three years and who did not receive a favorable mortgage recommendation could have instead received an “approved” or “eligible” recommendation if their rental payment history had been considered. 

To take advantage of the rent payment history feature, Mastercard provides a Verification of Asset and Income (VOAI) and a Verification of Assets (VOA) report through its Mortgage Verification Service (MVS) that includes 12 or 24 months of transaction data that Freddie Mac and Fannie Mae can use to identify rent payment history that may provide a more favorable credit assessment.

If they are using the VOA report, lenders have the freedom to access either two or 12 months of data to satisfy their own underwriting requirements. The reports can be called with a direct API or are available currently in ICE Encompass and Encompass Consumer Connect, as well as the SimpleNexus mortgage point-of-sale (POS) platform. 

Integrated with Freddie Mac and Fannie Mae Systems

Mastercard is a service provider for Freddie Mac’s automated underwriting system, LPA, which automates the assessment of borrower assets, income and employment using LPA asset and income modeler (AIM). By leveraging the expertise of service providers, AIM helps to deliver a simpler, more efficient loan origination process.

Fannie Mae’s DU validation service also accepts our mortgage verification services to independently validate borrower assets, income, and employment data—providing Day 1 Certainty® on validated loan components. By digitally validating secure third-party data through DU, you can help eliminate the paper chase and help get your borrowers approved quicker.

Learn more about Mortgage Verification Services here or request a demo from one of our open banking experts.

Open banking is a big deal.

That means that Mastercard’s platform (which includes services from Mastercard’s wholly owned subsidiary, Finicity Corporation) is a combination of the work of many different disciplines like engineering, financial expertise, security and more. At the center of it all are product analysts like Kayla Kent, who began at Mastercard in December 2021, after moving to Utah from Northern Virginia.

What’re your responsibilities?

I’m on the consumer experience team, and we support the development of Mastercard’s open banking products. As a product analyst, I’m kind of the middleman between our development team, our design team, marketing, legal, etc, making sure basically that we’re on track and aligned with our product roadmap. I help support the team through the software development lifecycle with an agile project methodology.

What kinds of challenges do you solve?

When we’re going through our backlogs and getting work ready for our development team, there’s a bit of planning that goes into that, so a project management hat goes on. And then we’re working with our design team and reviewing product designs and features that are going in, so I’m putting on more of a creative hat. When we’re doing competitive analysis and seeing how we can be better, I’m wearing an analytical hat.

How does your team exemplify Mastercard values like urgency?

Our team just gets the work done. If there’s something blocking us, we’ll escalate it immediately. We help each other out by seeing if there are ways to fix any issues that are keeping the project from progressing, making sure we’re pulling in the right people to address those problems and things like that.

What’s the culture like on your team?

We have a lot of team bonding social events. So we’ll do a lot of lunches together; we do a bi-weekly team social where we’ll play games and stuff, which is super nice. Because it’s not just like it’s all work between your colleagues. You’re kind of building a relationship past that and having that cohesive team feeling.

I think what’s really cool is that, like, on Slack, there’s all these various team channels, and there’s one that’s called “#misc_womenatfinicity” where we’ll share upcoming volunteering events or career development events that are going on. Another cool resource is Unlocked, which is a resource where you can build your profile and find other volunteering opportunities if you want to develop certain skill sets, or even find a mentor.

What does working at Mastercard enable you to do in your spare time?

There’s a good work-life balance at a Mastercard company, and my fiance and I wanted to live in the Salt Lake City area because of all the outdoor activities the area has to offer. So in my free time, we do a lot of skiing, hiking, camping and exploring the national and state parks down in southern Utah, which has been super fun.

It’s a bit of a slower-paced lifestyle here, which I like because you get a chance to breathe, whereas in Washington, or really in any urban area, you get really wrapped up in your work, you’re pulling a lot of overtime and you’re kind of consumed in that.

Why should someone consider joining the Mastercard open banking team?

I was interested in working in fintech because you get more opportunity to truly innovate, which you don’t get at every workplace. Another thing is that Mastercard has subsidiaries and offices everywhere, so you’re working with people in places like Europe or in India, and you get that different perspective or background from them. The four weeks of work-from-anywhere time is also really nice—since my family and a lot of my friends are based on the East Coast, it’s nice to be able to take advantage of that.

Interested in joining our team?

We’re growing! Search for and apply to our open positions here.

Also, stay informed about news, events, and opportunities at Mastercard by joining our talent community.

Small-to-midsize business (SMB) owners have had to pivot and adjust to the new realities of the economy, throughout the pandemic and beyond. Implementing new business models, investing in PPE and managing employees all come with additional costs, in a business environment that’s already rife with inflationary pressures. 

Managing these challenges takes every available resource, and owner-permissioned SMB open banking data is powering the financial management apps and services that owners are embracing to improve their business operations. According to Mastercard’s Rise of Open Banking Small Business report, connecting accounts is the main driver that provides the insights and analytics that owners are looking for to help tackle critical business tasks. Ninety-six percent of owners are currently linking their business financial accounts, taking advantage of fintech apps and services that leverage open banking data to generate crucial information and insights for their businesses, helping to improve decision-making. The top reasons for connecting accounts are: 

With all the benefits of linking accounts, fintech innovators have a window of opportunity in the SMB space to improve the connection process:  

Even with the understandable adjustments that it takes to press forward into a new era of digital business and financial management, the desire to adopt is strong in the SMB sector. Owners want to digitize their businesses to help prevent fraud, automate processes and share data and insights across apps. 

Linking Accounts Generates Real-Time Financial Insights

Despite rising fintech use, 94% of small business owners still encounter financial pain points. Many of them cite financial management as a major source of stress.

Owners are seeking solutions that can help them with financial management to address these pain points. They’re looking for better ways to harness their business’s data to get a holistic view, optimize financial management and inform business strategy. 

This is where SMB fintech services providers can step in and provide solutions, partnering with SMBs as they push forward into the new digital economy. Owners are open to receiving help. Sixty-three percent are looking for help with financial planning for their business, and 85% want the kind of custom financial recommendations that come from linking accounts and sharing open banking data. 

The top driver for owners linking accounts is improvement in business decision-making. This comes directly from financial management apps and services. Real-time data paired with AI, machine learning and analytics can have a powerful impact on an owner’s speed of decision-making and action, allowing them to either take advantage of opportunities or avoid costly mistakes. 

Better data and better decisions naturally feed into the rest of the top-three SMB owners’ concerns: saving time and improving financial health. 

How Small Businesses are Using Open Banking Fintech Apps and Services

According to Mastercard’s report, banking is the top use case for small businesses, once they link their accounts. Depositing checks, paying bills and transferring funds are core, everyday needs that SMB owners are currently using fintech to accomplish. 

Billing and invoicing can be streamlined and automated with fintech, and small businesses want this. Sixty-one percent of small businesses are already using fintech to do so. When routine tasks can be handled in the background by apps, owners can move more pressing concerns to the forefront. Growing, scaling and developing products or services can be given the bandwidth they deserve.

Sixty percent are using digital apps and services for cash flow management. With real-time data from linked accounts, owners can pay bills strategically, while making sure they can pay vendors, employees and themselves. 

While the number of SMBs leveraging fintech apps is currently in the 50-60% range, the Rise of Open Banking study found that the number who want to use digital apps and services powered by open banking is over 90% for the majority of use cases. 

The 31.7 million small businesses in the US are looking for more choice in financial services. They’re willing and ready to adapt to the digital future, and are looking for innovators that provide solutions to help them make better decisions.

Mastercard’s “always on” platform means maximum connection uptime and the highest quality data for insights into the financial health of a small business. Read the full report here to see details on the solutions small businesses are looking for from financial service technology.

*Some open banking services are provided by Mastercard’s wholly owned subsidiary, Finicity Corporation.