The battle between tech companies and big banks over access to consumer data is escalating. Tech companies are intent on gathering this information to enable them to offer new types of loans and financial products and banks don’t want to give it over without struggle. Banks have recently been trying to restrict the distribution of this data to tech firms. Both see the opportunity to profit off the use of this consumer information.
Increasingly, online data is understood as a highly valuable asset within the world of finance. Health records and online browser data are also highly coveted and battles are waging over who can access them. The technologies seem to be moving quicker than the laws that govern them.
Some banks want to put that data in the hands of their customers but are seeking guidelines on doing so since there are so many security risks. Yet tech companies seem to think banks are just resisting sharing it since the tech companies may be able to offer the consumer better deals.
Tech company executives seem to think the banks don’t want their customers to realize how much they’re paying in fees. The 2010 Dodd Frank act advised banks to make customer records available to them but with little details or guidance. The Consumer Financial Protection Bureau believes sharing the data will spur competition and innovation.
Banks have been trying to push new restrictions on accessing that data. Few standards currently exist for gathering it and there is uncertainty around who’s liable if there is a security breach in transfer. A new agreement between J.P. Morgan Chase and Intuit gives easier access along with new limits on the use of the data.
Yodlee, one of the biggest data aggregators has been chastised for how they use the information they collect. They sell it to hedge funds who analyze credit card transactions for insight on a company’s performance. Banks like J.P. Morgan Chase want to craft deals that preclude selling this information to third parties. The new agreements being crafted now are likely helping to shape the direction of this trend, yet tech companies think the banks might be getting too much control in the process.
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