An association of banks and financial technology companies has released a tool that it hopes will help financial institutions securely share data about consumers across the online financial tools that they use.
The Financial Services Information Sharing and Analysis Center (FS-ISAC) is releasing an application programming interface (API) in order “to foster universal adoption of a more secure and robust data sharing framework,” according to a statement released on Tuesday.
“Over a lifetime, consumer data may be scattered throughout several financial institutions,” the FS-ISAC says, which creates a need for consumers to log into multiple accounts to manage loans, deposits, payments and investments. The new API tokenizes sensitive user information, which the association says facilitates and secures the transfer of data from company to company.
“Creating a standard API for secure data sharing benefits everyone in the data aggregation ecosystem,” FS-ISAC Chief Operations Officer Eric Guerrino said in a release. “We want to ensure that everyone from the consumer to the financial institution and the data aggregators can share information safely, quickly and accurately.”
The new API is intended to benefit services that aggregate customer financial information on one platform, like Mint, Finicity and others. It would eliminate the need for those services to maintain multiple versions of “screen-scraping scripts.” Aggregators commonly use such scripts to log into customers’ financial accounts and manually extract information the customer wants to see on the aggregator platform.
Screen scraping has been criticized in the financial industry as an inefficient and insecure practice.
When a company adopts the new API, “the consumer will be able to access their own information seamlessly and securely, creating a higher degree of awareness, control and accuracy over sensitive data,” the association says.