Financial technology innovation is at the core of Intuit’s business and we have been working for years to make digital financial life better for consumers, small businesses, and the self-employed. Ensuring secure, reliable, user-controlled financial data access is a foundation of modern digital life, and it’s a key element of Intuit’s mission to drive prosperity around the world.
Along with our partners, I’m pleased to share the launch of the Financial Data Exchange (FDX). Through this collaboration we are working with other industry leaders to address common challenges around the way we can access that financial data with our customers’ permission.
What is the Financial Data Exchange?
The FDX, a subsidiary of the non-profit Financial Services Information Sharing and Analysis Center (FS-ISAC), seeks to enhance security, innovation, and consumer controls around the industry’s use of consumer financial data. The need for these measures is simple to understand. As digital transformation reshapes every corner of modern life, consumers now use online and mobile applications to make payments, save money, apply for loans, track expenses and budgets, donate money, and even pay taxes. These apps live on data. They need to recognize and validate user identity, connect this identity to the user’s bank accounts, capture the user’s financial transactions, access past documents such as bank statements and tax returns, and so on.
There have been many ways to gather this data; one example is “screen scraping”, where a financial application accesses the web site where the data resides, such as an online banking site, under the direction of the user, and “scrapes” the data it needs. This method can create some challenges from a technical perspective, as the data connection in some cases may be broken, leading to data not always being the most current.
How will this improve modern digital practices?
Improving access to financial data and solving the problem of exchanging accurate and up-to-date data in a secure fashion can only be addressed on an industry-wide level, working collaboratively across all the necessary stakeholders—financial institutions, financial app vendors, data aggregators, consumer organizations, and government regulators. That means developing standards that can be easily used by anyone, both data providers and data users, without high technical barriers or costs. This is not the first time Intuit has participated in this kind of collaborative approach to solve a big challenge. For example, Intuit was a leader in creating is the OFX standard, a data exchange mechanism now used by thousands of data providers and millions of users. FDX builds on and extends this foundation.
FDX will work to unify the financial sector around an interoperable standard and operating framework based on the Durable Data Access (DDA) specification. The DDA application programming interface (API) replaces the need for screen scraping, reduces the need for fintech companies to store consumer login credentials, and provides a controlled and more reliable and accurate access for consumers to their financial data.
For consumers, small businesses, and the self-employed, FDX and DDA offer better control over their personal financial data by improving the options available for granting data access. Financial institutions gain a simpler, more reliable process for securely sharing consumer data with fintech companies. Fintech companies, in turn, can more reliably and accurately access the consumer financial information they need to offer rich, differentiated services, while avoiding many of the customer security and privacy concerns that might previously have limited their success.
Where we go from here
FDX is an important step forward, but it’s not the end of the journey for Intuit or the global financial industry. We’re also a member of the Financial Data and Technology Association (FDATA), a global trade association pursuing the same goal on a worldwide basis and addressing the core policy issues around financial data sharing.
Initiatives like these involve hard work, creative innovation, and long-term dedication across our industry, but they’re both necessary and beneficial. Intuit is committed to working with all industry participants around the globe to ensure that consumers, small businesses, and the self-employed have access to and control of their financial data in whatever application they choose and to continue to promote open standards and their broad adoption.