Financial institutions generate large amounts of data, especially with the increasing use of digital payments. This data can be used in the creation of more accurate prediction models and calculate more accurate calculations. However, this data often contains personally identifiable information. This is why regulations and laws such as GDPR in Europe and the California Consumer Privacy Act in the United States limit how and the extent to which financial institutions can share customer data.
Sharing financial information is important for a wide range of reasons such as better fraud detection and quicker application processes. You can also get more services and products like credit cards and loans by sharing your financial data. If you choose to give access to your financial data it is crucial that you do so with an established partner. Reputable apps, companies and financial service providers must be able to clearly explain the purposes of your data sharing, as well as the specific partners they’ll collaborate with to share your data.
The crucial element to unlocking the potential of financial data aggregation lies in creating an open and unifying data ecosystem that allows users to carry out distinctly different tasks without putting themselves at risk. Securely accessing and process data in real-time is vital as is having an understanding of each user’s role. To achieve this goal, effective control of access to data is required to ensure security while also providing utility. The main goal should be allowing live financial information to be moved between different departments or companies while ensuring that rights of the customer are protected.