The introduction of smarter technology tools and applications has provided consumers and small businesses with the opportunity to take control of their finance lives like never before. Remember the old days of balancing a checkbook with a scratchpad, pen and calculator, or struggling to figure out how much total debt you owed, or when a bill was due?
Using these smarter tools, Americans are able to see the entirety of their financial state in one place in a couple of clicks of their mouse (or smartphone). Americans like you can invest smartly, manage budgets, automate savings, and so much more.
At the heart of the consumer’s or small business’ ability to use these tools, however, is the right to access and share your own financial information.
For instance, let’s say you want to have your investment consultant review your entire stock portfolio at three different banks. One option is to gather up all the different paper statements from all the different places where you may have investments. Alternatively, you could simply use smarter technology that gathers and sends this information to your investment consultant electronically. The choice should be yours, not the big banks’.
Unlike in many other places in the world, the essential consumer right to financial data freedom has not been firmly established in the United States, and some financial institutions are taking advantage of the lack of consumer data privileges by seeking to restrict their customers from accessing and sharing this information with these smarter tools. In some cases, they’re even trying to deny you — their customers — from sharing any data at all. Under that system, you lose.
Today, banks, financial technology companies, and policymakers are working to create new rules, roles and responsibilities for a 21st century financial system. But where is the consumer’s voice? We at the CFDR seek to promote the voice of the consumer, constantly advocating for safe, secure, unfettered access to your own financial data.
In addition to promoting your voice and right to access and share your information, CFDR is also committed to improving dialogue throughout the financial system, actively engaging the government, and working with banks, fintech innovators, and third party platforms. Importantly, the CFDR aims to be a resource for policymakers as they determine how best to assist consumers in accessing and sharing your financial information.
Security: The CFDR supports security that protects the consumer, while helping them use the financial tools of their choice. Security should make sense and not be used to prevent access to their own information.
Alternative data: The CFDR strongly supports the use of consumer-permissioned transaction data to improve lending underwriting decisions to help consumers get better loans. This is especially true for those who aren’t well-served by the traditional credit reporting model, including the millions of hard-working Americans who are credit invisible.