J.P. Morgan, Wells Fargo among banks piloting data-sharing risk assessment service

IHS Markit, TruSight and KY3P are launching a new service to make it more efficient for financial apps and data aggregators to provide assessment information to financial institutions (FIs), and for each FI to conduct its own risk assessment. The third-party “Streamlined Data Sharing Risk Assessment” incorporates work developed through The Clearing House’s Connected Banking initiative to standardize and streamline risk evaluations of data aggregators and financial apps.

Each time a FI wants to establish or renew a connection with a financial app or an aggregator, it separately requests and receives the information relevant to its risk assessments, resulting in redundancy and inefficiency that slows the process of signing and executing agreements with data exchange partners. This new centralized service can streamline the process for FIs, financial apps, data aggregators, and others as they look to help consumers safely share financial information.

The Streamlined Data Sharing Risk Assessment was piloted by The Clearing House with participation by Finicity, Plaid, Bank of America, J.P. Morgan, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo.

“This centralized approach can reduce the need for financial apps and data aggregators to provide the same risk information again and again as they engage in data exchange agreements with FIs,” said Ben Isaacson, senior vice president and Connected Banking Product executive at The Clearing House, in a statement. “It aims to help financial institutions of all sizes meet their risk requirements more efficiently and cost effectively.”

The Clearing House’s Connected Banking initiative determined what information the apps and aggregators needed to submit to satisfy due diligence requirements. The initiative seeks to enable the transmission of bank-held financial data via APIs to fintechs in a more secure way, while improving customers’ control and visibility of the financial data they choose to share.

“Open banking is transforming the way consumers and organizations are able to share and benefit from their financial data,” said Ryan Christiansen, senior vice president of data access partnerships, Finicity. “As an industry, we have a responsibility of supporting these efforts with the highest levels of security. This pilot – and the programs that will follow it – will help deliver that in a streamlined and simplified process.”

TruSight, which performed the pilot assessments, was able to streamline and simplify information gathering from participating data aggregators and then provide it over a secure platform to each of the participating financial institutions. The streamlined process gathers a large portion of the information required by financial institutions, potentially reducing the need for lengthy follow-up information gathering.

A key focus of the Connected Banking initiative is facilitating the use of APIs to connect banks, data aggregators, and fintechs, giving consumers control and visibility into how they share their data. The Clearing House is a founding member of Financial Data Exchange (FDX) and encourages the use of the FDX API for secure and transparent data sharing.


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