Financial Data Sharing: Tricks and Treats to Know

As Halloween draws near, the financial data ecosystem is experiencing tricks and treats alike—though much like candy preferences, opinions may differ. 

In celebration of this spooky holiday, here’s a closer look at three interesting updates around financial data sharing in the United States and what you need to consider. 

Imagine the CFPB as the house giving out full-sized candy bars. The rulemaking for Dodd-Frank Act Section 1033 has firmly established the Personal Financial Data Rights Rule and initiated regulation-backed US Open Banking. That means consumers will receive uniform access and protection when sharing their financial account data with the tools and advisors they choose. The rule takes away the uncertainties in such data sharing, making it easier for advisors to have conversations with their clients about data access.

But it’s important to note that the initial rule applies primarily to bank accounts and credit cards. We’ll need to wait for the Rule to cover access to other account types, such as brokerage and retirement. Until then, ByAllAccounts, part of Morningstar Wealth, will continue to fuel our Data Network with Open Banking APIs, data feeds, and investor-linked access methods for the industry’s most comprehensive wealth data coverage.

Although well-meaning with its actions under the STOP Act to protect student loan borrowers from repayment scammers, ED is moving the loan servicing websites behind government-controlled security systems, preventing third-party access.  

Similar to a house giving out fruit instead of candy for Halloween, these efforts are nice but not ideal. Due to this shift, financial advisors can’t access balance, interest, and repayment data to provide advice. Still, ByAllAccounts is working with our industry partners to advocate for better third-party access without compromising the security or integrity of the borrowers’ portals. 

Lastly, Fidelity Investments and its recent enforcement of its screen-scraping ban sets clear guidance for how workplace savings plan participants and their advisors should access, manage, and trade within the clients’ accounts—all in effort to help protect client data security and privacy.

Much like candy corn, this decision could be seen as polarizing since the move has broken workflows that allowed non-plan advisors to take action on their advice rather than depend on their client, the plan participant, to do it. The good news? ByAllAccounts can help wealth platforms and advisors reestablish compliant view-only access to their clients’ Fidelity workplace saving accounts via Open Banking API connections.