Open Banking, Partnership Announcements
Finicity and Fiserv: securing the open banking ecosytem
For innovative financial services apps to work effectively, they need to meet the needs of their customers. One of the core ingredients of next-gen apps is accurate, up-to-the-minute financial data. With this data, apps can transform user financial service experiences, enabling consumers to direct payments and gain insights into savings and spending. Apps can even remove the friction of applying for loans.
The challenge is coming up with a secure way to enable access to this all-important data.
According to Mastercard’s Rise of Open Banking survey, nine out of 10 consumers already use technology to manage their money. Apps like Experian Boost, which helps consumers improve their credit score, or Quicken, which provides a 360-degree view of finances, save consumers time and add convenience to their lives. Open banking platforms, which allow users to grant third parties access to their banking data, provide the data that makes the functionality of these apps possible.
The backbone of open banking is empowering consumers and small and midsize businesses to securely share data. Legacy technologies have played an important role in this. However, this data sharing experience increasingly is enabled through an API connectivity model that will further increase security and improve data access.
Mastercard has partnered with Fiserv to move this open banking model forward.
Fiserv enables thousands of banks to easily and readily deploy digital capabilities and services. AllData® Connect from Fiserv enables consumers to grant permission through their bank to share their data with the apps they want to use.
The bank then issues a token that can be used to authenticate the sharing of the consumer’s financial information with the apps they use through the Mastercard open banking platform. This permission is transparent to the consumer and can be managed and revoked easily.
With nearly 40% of US banks using Fiserv core technology, the partnership with Mastercard expands consumer access to secure and convenient tokenization capabilities, and is set to fast-forward the growth of new financial experiences through this secure, direct API access.
Expanding Secure, Tokenized API Access to Upgrade the Open Banking Ecosystem
The partnership between both companies represents a significant leap forward toward the goal of fully tokenized, direct API access and the retirement of legacy technologies. Mastercard, through its Finicity acquisition, has long taken a leadership role in the adoption of API connectivity and has moved the majority of its traffic to these connections.
“The primary goal of this agreement is to remove the need for consumers to have to share their banking usernames and passwords with third parties in order to access their financial information,” says Paul Diegelman, vice president of Digital Payments and Data Aggregation at Fiserv. “The ability of fintech apps to access information via direct APIs also reduces the need for screen scraping, while improving the consumer’s user experience.”
AllData Connect from Fiserv makes it easy for banks to facilitate data sharing on behalf of their customers. Fiserv manages technology integration for the banks, saving them time and the costs related to implementing and maintaining the technology on their own. AllData Connect also provides banks more insight into the apps their customers are using, to simultaneously protect the data and provide services that create loyal bonds between the customer and the bank.
“Mastercard has provided credit and debit solutions to the Fiserv ecosystem for years,” says Ryan Christiansen, Mastercard’s senior vice president of data access partnerships. “Now through this agreement, we deepen our relationship by providing trusted data-sharing capabilities that fuel next-gen financial service experiences, such as expanding payment choices, budgeting and lending options to consumers and small businesses through the financial institutions supported by Fiserv.”
Learn more about Finicity, a Mastercard company’s principles and innovations here.