Presented by Envestnet | Yodlee
Open banking is only the beginning — the open finance trend is bigger. Join this VB Live event to learn about open finance, what it means for your business, how it is revolutionizing customer experiences in insurance, utilities, telecommunications, and more.
Historically, consumers have been at the mercy of screen-scraping, where companies can try and gain access to data, often without their knowledge. Open banking gives back control to the consumer. It’s the sanctioned, secure, reliable, and user-controlled sharing of basic financial data. A user can permission third-party financial service applications, such as accounting apps, tax apps, mortgage applications and so on, to access their data in a reliable and secure manner. The bank is the steward of the consumer’s information, but doesn’t own it.
Open finance goes a step further — or the next step, says David Nohe, CEO of FinGoal, which builds analytics and infrastructure for financial brands. Open finance gives the user control of all of their financial information, including insurance data, telecom data, and utilities like gas, electric, even trash and recycling expenses.
By giving access to your Geico or Allstate account through an open finance platform, a company like FinGoal gains visibility not just into how much you spend on insurance, but exactly what you get from insurance, he explains. That allows them to shop around, constantly looking to ensure the consumer has the best deal in the market to fit their needs, and isn’t over-paying for coverage or features they don’t use, Nohe says.
The same is true in telecom or utilities. You’re paying a certain amount to Verizon every month, but unless you can securely share the details of the plan, you lose the opportunity to leverage an analytics platform that can tell you what kind of deal you could land at another company.
“In an open finance world, companies like ours can better serve end users in comparison shopping and ensuring they have the best value, or catching when they’ve been overcharged, or when there was a fee that they might not realize happened,” Nohe says.
Credit unions are embracing new ways of delivering information to their members, says Dawn Sirras, SVP fintech partnerships at Constellation Digital Partners, an open development platform for credit unions. Digital banking doesn’t need to be limited to viewing your balance, checking transactions, and making transfers. It can be a much more comprehensive, engaging, and interactive experience.
“With open finance, we’re creating a hyper-personalized experience, where the member can look at a 360-view of their financial well-being, performance, and opportunities for improvement,” says Sirras. “By expanding the data set, we give the consumer the opportunity for a much more holistic view, which in turn just leads to better decision-making, and being more informed about their financial position and how they’re performing in the marketplace and in life.”
There’s still work to be done, both in terms of regulation and the tech surrounding the initiative, but the groundwork is being laid right now for open finance. Large institutions have seen the writing on the wall for the future of data privacy regulation, particularly with the passing of recent laws in California and the EU confirming that user data belongs to the user. Industry pundits are betting that these laws are likely to be replicated at the federal level within the next handful of years.
Smart companies need to be prepared — and be mindful of what happened to the banks in the last decade, Nohe says. Banks that were reluctant to share data, and made it harder for their customers to access their data through platforms like Mint.com, lost customers.
So regardless of the size or age of your company, this open finance world is inevitable — data sharing is only going to become more powerful, and the data is only going to become richer, with higher fidelity. That means organizations need to be proactive, and start positioning themselves to take advantage of the opportunities it will bring, Nohe says. Now is the time to think about your road map, your customers today and in the future, and how access to more third-party data will enable you to serve them better, both when they’re on your platform and when they’re in third party platforms.
“If you’re thinking about it in that holistic way, where you’re serving your users wherever they are, whether they’re in your interface, your applications, or someone else’s applications, you’re going to win market share and make users happy,” he says. “A lot of the industry will not go that route — they’ll be slow and stubborn to react. But it’s a ton of opportunity for folks that are thinking about the future.”
Sirras agrees, urging companies to not be constrained by the past, or current processes.
“We all need to be willing to look at new ways to deliver value to our customers or our members, to be more efficient, to be more effective with what we’re doing,” she says. “If that means a period of discomfort as we adjust to change, we need to be okay with that if it brings about a greater end product.”
Don’t miss out!
Attendees will learn:
- How open finance is evolving around the world and in the U.S.
- How access to alternative data can transform the customer experience
- Why industries like insurance, utilities, and lending benefit from open finance
- How open finance could encompass mortgage info, pensions, investments, and insurance policies
- How to position yourself on the leading edge of open finance
- Dawn Sirras, SVP FinTech Partnerships, Constellation Digital Partners
- David Nohe, CEO, FinGoal
- Brian Costello, VP, Data Strategy and Strategic Initiatives, Envestnet | Yodlee
- Jenn Underwood, Moderator