Food for Thought: Top Problems with Financial Data Aggregation

UrsulaA

From Investopedia: https://www.investopedia.com/articles/financial-advisors/021216/top-problems-financial-data-aggregation.asp

KEY TAKEAWAYS

• Banks have typically been hesitant at sharing client data with third-party fintech firms and financial aggregators due to privacy concerns.
• Banks have also struggled with distinguishing data aggregators from hackers trying to conduct fraudulent behavior.
• In 2018, several banks partnered with data aggregators and fintech firms to establish the Financial Data Exchange (FDX).
• The FDX is a nonprofit organization designed to create a governance framework for sharing data and privacy.

The Bottom Line (my edits in italics, emphasis added)

Data aggregators have become extremely popular over the past several years, with the rise of services like Mint (shutting down March 2024) and Personal Capital (now Empower). While consumer demand for these services is apparent, in the past, banks and other financial institutions had been hesitant to allow access to client account data. However, with the formation of the FDX, banks have a method of working with financial aggregators and fintech firms to protect client data while keeping their customers happy.

As noted elsewhere in this community, some banks block aggregation. The article mentions FDX.

https://financialdataexchange.org/#acco2

I see that aggregators that Simplifi uses, Intuit and Finicity are members of the FDX. That is encouraging. Also, Plaid and MX are members, which are other financial aggregation providers.

Hope FDX makes aggregation easier and connections smoother. Also, kudos to the Quicken Simplifi team for using OAuth API to connect to institutions when available.

As users, we need to have patience when connection issues arise. The financial data system is complex to navigate with many players.

UrsulaA

A related piece on personal finance apps from Forbes

https://www.forbes.com/sites/ronshevlin/2023/11/06/the-demise-of-intuit-mint-and-personal-financial-management/?sh=648ba4352080

This part was interesting. I feel Simplifi's spending plan helps achieve saving, spending, and paying bills as outlined below if configured properly. I like that the spending plan goes forward up to 12 months. The investing area and savings goals could be improved to help users save more effectively.

Item 4, protection, is the realm of insurance, identity protection, and cybersecurity services.

The Financial Performance Imperative

Performance versus health? This is just mincing words, no? No. There’s a difference between high performance and financial health when it comes to:

• Saving. You’re financially healthy if you save a certain percentage of your income. You’re achieving high performance if you optimize the return on your savings and investments.
• Spending. You’re financially healthy if you spend less than a certain percentage of your income. You’re achieving high performance if you maximize the discounts and deals you get on what you’re buying.
• Paying bills. You’re financially healthy if you pay your bills in full and on time. You’re achieving high performance if you reduce your bills and cancel subscriptions.
• Protection. You’re financially healthy if you have adequate insurance on your physical assets. You’re achieving high performance if you reduce you protect your data and identity assets.

UrsulaA

Screen scraping

The banks and regulators are clamping down on screen scraping. I believe Mint.com used this method to get the credit card statement balances and payment due dates that users are clamoring for in this Community. Without screen scraping, alternate connection methods are needed to load credit card statement balances and payment due dates. Over the long run, Mint.com could not sustain creating connections with API to get information it used to get with screen scraping. That is one reason for its demise, in my view.

I would love to have credit card statement balances and payment due dates in Simplifi and hope that a safe connection method is put in place to obtain them sometime.

Articles about screen scraping

https://riabiz.com/a/2023/11/16/embattled-mintcom-is-shutting-for-good-weeks-after-fidelity-finally-cut-off-free-screen-scraped-data-that-was-at-the-heart-of-its-business-model

https://www.atlantafed.org/blogs/take-on-payments/2023/12/04/listening-for-death-knell-for-screen-scraping

RockLee

@UrsulaA I think you are on point here, just to add a little to the conversation. I think that all connections through Simplifi's Bill Connect uses screen scraping. That's why Bill Connect no longer work with the large financial institutions as of a couple of years ago when they began implementing the OAuth/FDX connections and shut down these more insecure types of connections.

For example Simplifi uses OAuth to add my PayPal account but when I try and use Bill Connect with PayPal Simplifi prompts me directly for my login credentials.

As a former computer engineer that worked at several banks, I looked into the specs for FDX, mainly to try and determine what data is made available. But it's difficult to get the specifics for a given institution. I speculate that the information Simplifi pulls from Bill Connect is available in the OAuth connection, it just isn't implemented yet, but can't say for sure.

UrsulaA

Thanks @RockLee for providing helpful insight on Bill Connect and screen scraping.