The Future of Payments

55 BANKING PERSPECTIVES QUARTER 4 2018 SECURITY VULNERABILITIES AND CONSUMER AWARENESS As a result, the current system of data sharing between financial institutions and FinTech apps has some drawbacks and vulnerabilities: • Consumers often have limited control over how their data is being used and/or shared by FinTech apps and other third parties. • Many FinTech apps leverage consumers’ bank account login credentials and, with them, gain access to their accounts. There is typically no way for a consumer to monitor or control how or when this access is used. • Consumer-permissioned parties and aggregators may store consumers’ bank account log-in credentials, creating the potential for harm in the event of a data breach. • There are no best practices, guidelines, or agreements that govern how FinTech apps and data aggregator intermediaries share and resell consumer data to other third parties. Recent events, such as the Facebook-Cambridge Analytica incident, 2 have also raised consumer awareness of data sharing and heightened concerns over the collection and use of personal information. In fact, the survey mentioned earlier showed that two-thirds of respondents said they are very or extremely concerned about data privacy when they use FinTech apps (Figure 2). The poll also indicated that many consumers are not familiar with the details of how their data is being accessed, used, and shared by these apps. For instance, nearly a quarter of respondents said that they would not use an app that stores their bank account credentials, yet that is precisely what many FinTech apps do to access information quickly and easily. After being told that many FinTech app providers, as part of their terms and conditions, gain consent from consumers to use their data for purposes other than operating the app itself, nearly half of FinTech users said they are now less likely to use these services. KEY PRIORITIES TO ADDRESS CONSUMER FINANCIAL DATA-SHARING CONCERNS In response to consumers’ concerns and lack of awareness, some government agencies, including the Bureau of Consumer Financial Protection (BCFP), have begun to tackle vulnerabilities in the current system of financial data sharing. TCH is similarly positioned to increase awareness and facilitate solutions to address data-sharing issues. As the nation’s first banking association, we have long supported financial institutions in their role as custodians of the payments system through education, advocacy, and measures that promote safety and soundness. TCH currently is working with our member banks and other industry stakeholders on a series of activities to provide financial institutions, FinTechs, and data brokers with recommended solutions for enhancing the security, IN GENERAL, HOW CONCERNED ARE YOU ABOUT THE PRIVACY OF THE INFORMATION THAT IS SHARED WHEN YOU USE FINANCIAL APPLICATIONS ONLINE OR ON A MOBILE DEVICE? 99% OF USERS ARE AT LEAST SOMEWHAT CONCERNED ABOUT DATA PRIVACY Very concerned Concerned Somewhat concerned Not at all concerned Extremely concerned 34% 33% 22% 10% FIGURE 2: LEVEL OF CONCERN REGARDING DATA PRIVACY USING FINTECH APPS Percentage who selected each level of concern among a targeted population of FinTech users Source: The Clearing House