Fiserv Inc. is working with data aggregator Akoya LLC to enable consumers to share their financial data with fintech and third-parties with which they do business in a way that doesn’t expose a consumer’s full banking credentials.
The partnership will provide Fiserv with access to consumer data from Akoya’s network of financial institutions and brokerage firms through application programming interfaces and allow Akoya to access consumer data from Fiserv’s more than 2,800 financial institutions through Fiserv’s AllData Connect portal.
Fiserv’s AllData Connect portal allows consumers to provide consent to share their financial data with third-party applications without having to share their log-in credentials. Instead, AllData Connect validates consumers directly with their bank or credit union and issues a token that the third-party uses to access and update consumer data via AllData Connect.
Data will be shared directly between Fiserv and Akoya. As a result, consumers will be able to give permission to safely share their banking credentials with the apps of their choice.
Sharing only specific data elements needed to verify ownership of an account or link an account to a digital wallet, as opposed to the sharing all of a consumer’s financial credentials, is a key element of the deal.
“Prior consumers had to share all their financial credentials with a data aggregator, but if the data aggregator was breached, those credentials were put at risk,” says Jamie DelMedico, vice president, head of product, bill, aggregation, and verification for Fiserv. “With no credentials being shared, it eliminates the risk of those credentials being breached.”
One reason Fiserv partnered with Akoya is that the data aggregator has broad access to demand deposit accounts through its relationships with some of the largest financial institutions in the country, such as Chase and Wells Fargo, DelMedico adds. Akoya is an account-access protection network.
The deal is part of the open banking trend that enables consumer-permissioned data sharing between financial institutions and third-parties, such as apps and merchant wallets, through APIs. “Consumers are engaging more with fintech apps and merchant digital wallets on a daily basis,” DelMedico says. “Financial institutions can’t keep up with all the niches fintechs are entering so it is in their interest to support opening banking to engage with fintechs that meet the specific needs of their customers and to enhance their customers relationships.”
Open banking also enables financial institutions and third-parties to share data and move away from a structure in which unregulated entities store large amounts of financial data, including consumer credentials.