Money20/20 is the must-attend fintech event of the year, gathering all the key players across payments, banking and financial services together in Las Vegas. This year, Data Zoo kicked off an action-packed week by sponsoring a sold-out meetup and panel discussion on the eve of the event.
Hosted by fintech experts Nicole Casperson and Alex Johnson, the panel discussed important issues around trust and transparency in open banking and digital identity. Nicole, founder of Fintech is Femme and host of the Humans of Fintech podcast, has a passion for championing diversity in fintech and inclusive companies helping to make finance human. Alex, Founder of Fintech Takes, is a former credit expert turned writer, podcaster, researcher, and consultant, offering insightful analysis on the future of fintech.
Here are just a few of the key takeaways:
Trust & Transparency
One of the key themes of the panel was trust and transparency. It’s clear that trust is hard to build and maintain, with only two per cent of financial services brands falling into the “strong” trust category, according to Forrester Research.
In fintech, transparent practices are not only ethical but also a competitive advantage, especially in the face of increasing fraud, identity theft and high-profile data breaches. Transparent operations can lead to increased customer loyalty, better user experiences, and higher rates of technology adoption when companies prioritize honest and clear communication with customers.
In the identity verification industry, solution providers vary significantly in how they handle and store personally identifiable information. In some instances, the storage and processing methods may be reasonable, but not always. This can lead to some businesses misrepresenting the extent to which their practices are compliant or ‘compliance washing’, creating a level of uncertainty and risk for businesses and customers.
“The challenge of trust in tech companies isn’t due to the failure of technology but a failure to deliver on expectations for data privacy and security”, says Tony Fitzgibbon, CEO at Data Zoo. “Businesses must take accountability for their seemingly limitless greed for customer data. We need to look at proactive measures to uphold trust, not just reactive responses when incidents inevitably occur.”
Open banking seeks to shift from banks being the sole gatekeepers of financial data to a more collaborative model where consumers can choose who they share their data with and for what purpose. Powered by Application Programming Interfaces (APIs), open banking allows consumers to approve the secure sharing of their financial data, promoting increased competition and innovation in the financial sector.
As an active current provider in Australia’s Consumer Data Right (CDR) ecosystem, Data Zoo has integrated into the CDR ecosystem with unrestricted level access, the highest level of all access models, allowing us to offer innovative and privacy-aware services to consumers. In particular, our approach to bank account verification streamlines the process, enhances security, and delivers quick and accurate results to customers.
As we headed into Money20/20, the Consumer Financial Protection Bureau (CFPB) released its long-awaited proposed Personal Financial Data Rights rule, signaling a significant step toward open banking in the U.S. The proposed rule aims to ensure the right consumer protections are in place to accelerate a shift toward open banking, ultimately supercharging competition and improving products and services for consumers.
While the proposed rule establishes a framework requiring providers of financial products to enable consumers to access, use and share their personal data, Erin Allard, General Manager at Prism Data, expressed concerns regarding the timeframe for its implementation, especially among smaller providers.
“In the wake of the CFPB's new ruling, we've reached a pivotal moment we've long anticipated. While this is a step in the right direction, the timeline for implementation poses some concerns. The major institutions have a mere six months to adapt post-finalisation, yet our smallest entities, often serving the most marginalized consumers, are given a lengthy four-year window”, says Erin Allard, General Manager at Prism Data. “These smaller institutions are heavily dependent on their providers, often lacking IT teams of their own. The challenge here lies in ensuring that smaller institutions are not left trailing behind due to their provider dependencies. Nevertheless, as we navigate this transition, I remain optimistic about the road ahead."
Digital identity is a collection of personally identifiable information (PII) that exists online, such as name, date of birth, address, and passport number, providing a digital representation of an individual once grouped. From combating fraud and financial crime to enhancing customer experiences and fostering trust in digital interactions, the concept of digital identity is rapidly gaining popularity.
Beyond these advancements, digital identity has the potential to be transformative for those underserved by traditional systems. Across the globe, nearly one billion people have no form of legal ID, hindering their access to essential services like banking. Digital identity can bridge this gap by creating digital-first or mobile-based identity solutions that ensure even those without traditional IDs can verify their identity, opening doors to financial and social inclusion.
While digital identity promises to unlock opportunities for both consumers and businesses, it’s essential to recognize its immense power. Across the globe, organizations and regulatory bodies have responded to the privacy and security challenges of digital identity by implementing stringent data protection standards and regulations, such as the General Data Protection Regulation (GDPR) in Europe. These measures aim to safeguard users' data, ensure transparent practices, and promote trust in the digital ecosystem.
Jeff Tijssen, Global Head of FinTech at Bain & Partners, suggests that for digital identity solutions to be successful, consumers will need assurance that their data is protected and won't be misused. "When thinking about who you would trust with something as personal as your digital identity, many of us might first think of governments as the logical candidate as they are not driven by commercial interests to monetize data. While big tech companies undoubtedly possess technical prowess, undeniable concerns about data privacy and other recurring issues arise when considering their role in digital identity. In my view, we will most likely need to rely on a collaborative approach between public and private sectors, as evidenced by successful models globally."
The insights shared at our Money20/20 meetup highlighted the essential role trust, transparency and innovation play in shaping the future of open banking and digital identity. As we navigate the ever-evolving realms of finance and online identity, it's clear that embracing cutting-edge technologies is not just a choice but a necessity.
We want to extend our gratitude to our hosts, Nicole Casperson and Alex Johnson, for curating such an enlightening conversation, to the panelists for sharing their expertise, and to every attendee who contributed to the success of this event.
Ready to see what you can do with Data Zoo? Speak to our expert team today to unlock the flexibility, innovation and privacy you need to power modern identity experiences.