The best way to tell the FDX story is through the voice of our members. This is the FDX Member Spotlight series, in which we sit down with some of the professionals from FDX member firms who juggled the responsibility of their day jobs with developing, integrating and implementing the FDX standard for the benefit of consumers and the entire financial services industry. We ask them about their experiences, goals and thoughts on the process.
Anthony Burton, Wells Fargo
Leads the digital data API product team, focused on broadening the Wells Fargo API suite
Jonathan Kassan, Xero
Leads integration efforts with financial institutions and service providers and Xero’s aggregator strategy
Why should the financial service industry care about using APIs to share permissioned consumer or business data?
JK: The use of APIs in this context should be important for everyone in the space because financial services is a consumer-centric industry. Using APIs helps meet the growing expectations consumers have for more control of their data, while making that data more secure. Many of us in the industry – and this includes the membership of FDX – also have mutual customers that each of us care about. So it's natural to want to advance this and to do it collaboratively through a standardized framework and best practices.
AB: I agree. I think our customers are looking for a new level of data portability, one that our current tools aren’t going to sustainably address in the long-run. When screen scraping began more than a decade ago, it was limited to a small number of players. Interest has ballooned in the last several years, but online banking sites were never built or intended to be used as a data transfer protocol. So we need a solution that’s easier to manage and offers consumers the kind of control or security they will require now and into the future.
Online banking sites were never built or intended to be used as a data transfer protocol. Moving to APIs is really a win-win-win. It’s a win for the fintechs, a win for the banks and, perhaps most important, a win for customers. It’s really the future of banking, which is a pretty good reason for the industry to care.
If APIs all operate in the backend, how are consumers going to know the difference? Does the consumer experience change at all?
AB: Yes, the consumer experience does change – but consumers don’t have to learn anything new. Let’s say you’re using a fintech app and want to connect to your bank account. The consumer typically enters credentials within the app, which then either scrapes the account directly or uses an aggregator to do the scraping. While the customer isn’t leaving the app, he or she is providing login credentials that are now being stored externally from the user and from the bank.
Using an API like the FDX API, customers will be redirected to their bank to authenticate on bank standard controls and then given the ability to select accounts they want to share. In a non-API, screen-scraping world, customers are basically throwing in the kitchen sink in terms of data access.
By moving to the API, the consumer will have control over what’s shared, and once they’ve selected that data and it is transferred from the bank to the fintech app, I’d argue consumers will have an even better user experience than before because the risk of the API being down versus a screen-scraping script being broken is much lower. In the end, data quality should be a lot better, and customers can update their permissions whenever they want to.
JK: Adding to what Anthony said, the user experience is a critical part of what FDX is working on – trying to create best practices for the user interface to make it clear to customers what they are consenting to before and after they are redirected to the financial institution. And I’d underscore that data quality and reliability are enhanced through the API connection.
I’d argue it’s actually even a better experience than before because the likelihood of the API being down... is much lower, so the data quality should be better, and customers can actually update their permissions whenever they want to.
What are your aspirations for the collaboration between Wells Fargo and Xero and for your customers by being involved with FDX?
AB: It’s pretty clear to us that this is the future of digital banking in a lot of ways. Our goal is to ensure our customers have data portability, security and control. Wells Fargo has a couple of steps in our journey. The first step is moving the volume of traffic on our online banking site from screen scraping to the API. That mitigates risk for us and helps our customers. It’s the “win-win-win” situation I described earlier.
I think a lot of banks and financial institutions are in a similar position – once you have widespread adoption and critical mass behind the FDX standard, with lots of different fintechs adhering to it, I think that together, we will create even more use cases than you could before. We’ll be able to open a lot more channels going forward and create exciting partnership opportunities.
JK: I think of it in two ways. As Xero and Wells Fargo work together, we want to create the best possible experience for our customers, which comes down to how reliable and how secure their data is and giving customers the control and insights into that data that they are requesting. But more broadly through FDX, we are hoping to achieve more than *just* a good experience for our customers. We want to impact the entire financial services industry. By creating best practices that enable data sharing in the most seamless way possible, t will impact consumers around the world and the institutions that will be meeting their increasing needs for financial services.