Regions is one of the newest members of the Financial Data Exchange, or FDX, a nonprofit organization committed to defining and promoting adoption of its common, interoperable and royalty-free FDX Application Programming Interface (API) for financial data sharing.
Members of FDX are creating standards around open banking, which allows for sharing of data between financial institutions and other entities through the use of third party applications.
Tim Mills, emerging payments manager, and Katie Nelson, digital strategist at Regions, recently sat down to speak with Don Cardinal, managing director of the Financial Data Exchange, to address what membership in FDX means for Regions and how it impacts the bank and customers.
Tim: What is the Financial Data Exchange and what role is it playing in the open banking ecosystem here in the U.S.?
Don: FDX is a technical standards body. We don’t make the financial software; we simply help the industry come together to decide what field within the software or application will be for what value, how many characters allowed— those kinds of decisions—that allow for easier financial data sharing. By having a neutral third-party act as the moderator we are providing a trusted space for large firms, small firms, academics and a variety of other people to collaborate.
Tim: FDX really brings together a diverse group of stakeholders to look at developing those standards. Can you talk a little bit about how that how broad the membership in FDX is?
Don: We have over 208 member organizations on four continents. Membership includes nine of the top 10 financial institutions, and 20 of the top 25; all three credit bureaus; all of the main financial data aggregators and a lot of the household names in fintech. But we also have consumer groups such as the National Consumer Law Center as well as professors from universities such as Georgetown and Stanford. By having such a diverse group of players, you’re guaranteed to have multiple perspectives and the odds of missing something is very small.
Tim: Katie, now Regions has joined that growing list, can you tell us about what that means and how it will impact both the bank, as well as the customers we serve?
Katie: So, what initially attracted Regions to joining FDX was, as Don mentioned, it provides a community and an opportunity for members to come together and collaborate and capture industry best practices. Everyone is working towards a common goal, and I think one of the things that we were most interested about is being able to learn from those leaders in open banking and support our team internally in making informed decisions. For our clients, I think as we start to learn from the FDX community, we’re going to be able to leverage that knowledge in a multitude of use cases—for our consumer, wealth, and commercial teams to be able to give our customers tools to be able to do a lot of unique things with.
Tim: One of the early-use cases here at the bank we expect to leverage the FDX standards is in support of our private wealth clients. Can you share with our audience some of the benefits those clients will see?
Katie: Regions private wealth management leverages a third party aggregator for the wealth planning group and one of the benefits of utilizing this tool with a wealth advisor is that clients are able to access this interactive and collaborative tool that supports account aggregation, business succession planning, income planning and retirement planning. One of the goals of the wealth group in working with the digital team was to support and enhance the digital client experience. As we thought through the client needs and assessed the current digital journey, we learned we could be more efficient by leveraging the FDX API to create a more secure and transparent way to share data and give control back to the client while simultaneously getting information within the wealth planning tool in real time. This was extremely important to the wealth group as they continued to try to support a more robust client experience.
Tim: FDX is empowering the industry to meet not only the changing expectations of consumers but. just as importantly, the changing regulatory expectations. How can FDX help its members meet those regulatory requirements surrounding data sharing?
Don: Because we have such a diverse membership, the standards developed by FDX are designed to work under any regulatory body – in the U.S. and Europe, as well as across the globe. We frequently talk to regulators about what we’re doing, what we have coming; we share documents and other spec items with them so they can see the progress we’re making and to give them the assurance that our standards are aligned with regulatory expectations. Regulators do reach out to us and we do reach out to them to keep each other informed. It’s a mutually beneficial partnership.
Tim: What’s next for FDX?
Don: As more organizations join and begin working side by side, you’ll see more capabilities being developed. For example, in the latest version that was just released, we have the first fraud reporting capability in open finance anywhere on the planet. What that means is if an app or an aggregator see some unusual activity in one of your accounts, they can go back and notify the bank. So these tools are not just about convenience for the customer or financial institution, we’re looking at how we can keep customers and financial institutions safe and how we can deliver value.
To learn more about the Financial Data Exchange, who their member organizations are, and how they’re moving open banking forward, visit the FDX website.