Some of America's biggest banks have joined forces with fintech firms to launch a non-profit organisation that tackles the contentious issue of sharing consumer data.
Bank of America, Citi, JPMorgan Chase and Wells Fargo are among the banks backing Financial Data Exchange (FDX), alongside a host of firms, including Intuit, Xero and Yodlee, that want access to consumer account data.

In recent years there has been a tug of war between banks and third parties over access to client data. While startups offering new digital services argue that consumers want to be able to share information, banks have been reticent, citing security concerns.

According to a recent survey, both sides have a point: nearly two thirds of respondents are very or extremely concerned about data privacy when using fintech apps, yet 56% want to control which accounts and types of data that third parties can access.

In order to break the impasse, FDX - a subsidiary of the Financial Services Information Sharing and Analysis Center (FS-ISAC) - has introduced an interoperable standard and operating framework centred on an API called the Durable Data API (DDA).

DDA promises to replace the need for screen scraping and credential sharing, benefiting everyone involved: Consumers will get better control over their personal financial data through improved access authorisation options; FIs will have a simple, consistent process for securely sharing data with third parties; and fintechs will be able to access information and provide services that consumers want.

Lila Fakhraie, co-chair, FDX and manager, digital banking API team, Wells Fargo, says: "The launch of FDX marks an industry turning-point toward the standardization of more secure financial data sharing.

"Our efforts will improve the efficiency and security around the exchange of financial information and empower consumers to control exactly what account data is shared with third-party applications."

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