For the second time in a week, Fiserv Inc. has taken a plunge into open-banking technology, announcing on Wednesday a partnership with Finicity, a Mastercard Inc.-owned open-banking platform provider. The deal comes hard on the heels of the partnership Fiserv announced last week with MX Technologies Inc.
The latest deal will allow financial institutions that are Fiserv customers to enable consumers to provide permission to securely share their account information with apps that use Finicity’s platform. Data will be shared through Fiserv’s AllData Connect service, a secure portal through which consumers can consent to share their financial data with third-party apps.
Finicity will access tokenized consumer data via AllData Connect. AllData Connect issues an identifying token in place of the consumer’s username and password. The third party is then able to provide that token to the financial institution to access the consumer’s data.
As a result of the deal, consumers will have more payment choices, access to an expanding range of financial services, and improved overall financial literacy and wellbeing, Fiserv says.
“The ability to share data directly and securely is a key requirement in enabling open banking and finance,” Marc DeCastro, research director at IDC Financial Insights, says in a prepared statement. “With the industry moving to standardize data access, it is important that financial institutions of all sizes are able to tokenize customer data and make it accessible to third parties. Greater connectivity will move open finance forward by facilitating the frictionless and secure financial interactions consumers want.”
For financial institutions, the payoff from the partnership will be the ability to simplify the complexities of the consumer-permissioned data and enable transactions through access to application program interfaces. Financial institutions will be able to better support their customers’ digital banking and financial-management preferences and allow them to share their data with the apps and services they select, Fiserv says. Financial institutions may also gain additional insights about their customers and the third-party apps they are accessing.
“Banking relationships remain central to most peoples’ financial lives, yet they also expect to access their financial data when and where they want,” Justin Jackson, head of product for digital payments at Fiserv, says in a prepared statement. “Direct connections via APIs eliminate the need for consumers to share usernames and passwords with third parties, providing convenient and simplified access to their data in a more secure way.”
Mastercard, which acquired Finicity in 2020 for $825 million, says the deal will empower consumers and organizations to give permission to use their financial data for their benefit.
“The strong payments connectivity between Mastercard and Fiserv via tokenization, traditional processing, and beyond extends across infrastructure, applications, and services to the secure and highly reliable API connections we’re enabling through open banking,” Ryan Christiansen, senior vice president, data access partnerships for Mastercard says in a prepared statement.