Consumer Autonomy and Pathways to Portability in Banking and Financial Services

One of the critical ways to promote economic security is by making financial services work better for more American families. Efforts to build a financial system that promotes consumer autonomy will involve innovation and reforms to our payment systems and more broadly, our policy and legal infrastructure. Such advances help empower consumers and harness technological innovation, but they also need to be grounded with strong consumer protections—especially in an era where people increasingly turn to technology to manage their financial lives. This white paper is designed to spark conversation among academics, private sector stakeholders, public interest organizations, legislators, policy-makers, and regulators about how to approach consumer financial data.

Consumer financial data is playing an increasingly important role in driving value creation in the financial services sector. Banks can now leverage advanced processing technologies to obtain new insights about client behavior to develop smarter projects. At the same time, data has fueled innovation by financial technology service providers (“FSPs”) that source data from banks. These service providers harness the data to create products and services that perform key consumer financial activities once handled entirely by banks and offer new experiences that banks themselves are often not delivering.

But who owns a customer’s financial data? FSPs assert that consumers should be empowered to own their own data, especially as this would introduce new competition into the financial service sector. Many banks, however, contend that opening up consumer information to third parties raises serious risks of fraud and abuse. Both sides of the debate advocate for the consumer’s interest: banks on the grounds of security and privacy, and the fintech sector on the grounds of access and innovation.