July 28, 2023
How the fintech revolution will lift all boats
Aly Yarris
Financial Access, Plaid
Aly Yarris is an executive on the Financial Access team at Plaid, where she leads partnerships and relationships across major financial institutions and large-scale platform providers, in addition to digital banking and Banking-as-a-Service initiatives.
Today, over 80% of US consumers use digital finance tools to manage their financial lives. Increased consumer demand for digital tools and experiences is top of mind for credit unions, community banks, and other financial services providers. At the core of the apps and services consumers want to use is secure data access and sharing through open finance technologies.
Charles Potts, EVP and CIO at the Independent Community Bankers of America (ICBA) recently led a panel to discuss these trends at the American Banker Digital Banking Summit. He was joined by Warren Pattison, Senior Leader for Digital Banking Innovation and Strategy at Alliant Credit Union, Jack Ingram, CIO at WECU, and Aly Yarris, Financial Access Partnerships at Plaid.
Driving the conversation:
Why financial services providers of all types are collaborating to improve their customers’ digital experience
What leading banks and credit unions are including in their digital roadmap
How institutions can prepare for the shifting regulatory landscape
Key Takeaways:
Open finance allows financial institutions to connect their customers to thousands of fintech apps and services. It also helps them utilize consumer-permissioned data to build their own digital finance apps and tools for personal finance management, investing, and more.
Now that digital finance has reached mass adoption, fintechs, banks, and credit unions are working together to improve their customers’ digital experience. These partnerships are leveling the playing field, making it easier for banks and credit unions of all sizes to empower their customers by providing them with secure, reliable access to their data.
“Open banking is an inevitability. You’re better off preparing for it now, by being nimble and flexible, as opposed to waiting until the last minute,” suggested Ingram.
Digital transformation starts with the right digital roadmap. Yarris suggested that financial services providers first think about the best way to provide data connectivity to their customers. APIs are critical to enabling secure and reliable connectivity for consumers in an open finance world. This is a good time to bring in a partner to help create a clear, long-term digital roadmap and determine which capabilities are right for you based on customer behavior and needs.
“Plaid is continuing to partner more and more with financial institutions who utilize Plaid as a customer. We think about how we can best accelerate your digital roadmap to do things like account funding, fraud mitigation, and building out your own PFM tools,” explained Yarris.
Institutions can leverage digital banking platforms, like Q2 or Jack Henry, to facilitate data connectivity or choose to build an API directly with a partner like Plaid, which offers its Open Finance solutions at no cost.
Select the best partners to help accelerate your digital transformation. WECU, a credit union with more than $2.5 billion in assets, selects partners based on their shared vision, ability to scale, and commitment to be there for the long term. With help from key partners like Plaid, WECU is able to retain their members’ trust by delivering consistent, frictionless access to their funds.
“We’re not looking for a partner that can just give us a year or two. We’re looking for the long game. We ensure our partners share their roadmap, make us a part of that roadmap, and we share that vision together. That’s been very successful for us,” added Pattison.
Ideal partners customize their solutions for each financial services provider. The right partner should understand the specific needs of each provider, whether that’s helping credit union members fund accounts or offering bank customers an easy way to manage data sharing with third-party apps and services.
“A really great way to build trust with partners is by actually delivering. We make the pace, efficiency, and ease of outcomes as straightforward and positive as possible,” commented Yarris.
Self-service tooling can enable data connectivity quickly and efficiently, improving outcomes. Plaid’s self-service solutions include its updated Partner Dashboard, API tooling, and increased privacy capabilities. Plaid has seen clients move from commitment to a live implementation in just two weeks.
Prepare for a shifting regulatory landscape. As regulators get ready to propose new open banking rules in the coming year, institutions can start preparing now by thinking through how this will impact their technical roadmaps. Plaid offers Core Exchange, a no-cost, Financial Data Exchange (FDX) compliant API specification—a scaled-down version of the API standard that's easy to implement.
→ Learn how to leverage Core Exchange to build industry-aligned API connectivity.
The future of open finance includes hyper-personalization. Leading credit unions and community banks are leveraging open finance to build their own tools, personalized to the unique needs of their account holders. These tools can harness transaction data and better data analysis tools to unlock actionable customer insights, helping improve long-term financial health.