Why FDX Matters — Promoting a Standard of Excellence in Financial Services
July 25, 2022 | 2 min read
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If you’re a bank, credit union, fintech or online banking provider, your customers are sharing their financial data whether you know it or not.
The demand for open banking started decades ago with screen scraping, and now open banking and open finance are gaining even more momentum in North America and globally—only instead of being done via screen scraping, it’s shifting to APIs. Today, FDX reports that 85% of the customer financial data being shared is done via legacy connectivity (screen scraping).
In the UK, EU, Australia and other countries, open finance is being driven by regulation. It’s simply required. In the US and Canada, we expect to see regulation delivered in the near future. The reality is that if you’re reacting to legislation and not market demand, you’re missing the importance and strategy behind open finance. Users want to share their data securely.
But why should financial institutions build APIs and partner with fintechs to share their customers’ data?
The answer is rooted in modern connectivity. Legacy connectivity is scrape-based. It requires your users to share their credentials, putting both of you at risk for fraudulent activity and a poor experience.
At MX, we define modern connectivity as tokenized, credential-free API access that’s built with the highest security standards and provides customers with the best experience. These modern connections are reliable. They receive data 10–20 times faster—in most cases under five seconds—with a 99% success rate. And MX is leading the industry with live connections to over 60% of retail accounts in the US.
With a connection that works, your customers can access and share their data in a safe and reliable way. It also gives better control to all data providers such as banks, credit unions, digital banks, fintechs and online banking providers.
This brings us back to our mission and vision. We have a strong belief that regardless of where a consumer chooses to bank, borrow, transact or make payments, they should be able to securely access and transparently share their financial information. People who bank with the biggest banks are able to do that now. They’re having a high-speed Wi-Fi experience while others are stuck in the equivalent of dial-up.
We know that building an FDX-compliant open finance API with OAuth protocols, legal agreements, user flows and administration portals is challenging, complex and costly.
But we have a solution. It’s called MXaccess, which is a fully featured API platform so every provider of financial account data—like those with crypto accounts; buy now, pay later; investments; student loans; mortgages and insurance—can have a data-sharing API.
MXaccess helps all data providers accelerate their open finance strategy, and we built it following FDX guidelines. As FDX board members, we align with their mission and goals of creating standards that protect and contribute to the success of open finance for all institutions. We want you to naturally evolve from being the trusted custodian of customers’ money to the trusted custodian of their personal data.
In the open data economy, you can often start with a handful of partners like MX. If you start to scale your partnerships manually, you’ll be quickly overwhelmed, which is why MXaccess is an open-source tool that allows you to build and manage an open finance platform on your own—or with our support. The platform allows you to easily view all connections in one place, streamlining the onboarding process digitally.
With better control of those who request access, data providers can protect themselves against attacks and even throttle the number of requests coming in from an individual provider.
Our vision of open finance is not just MX-centric. Rather, it focuses on the broader ecosystem that raises the bar for what data sharing will be in the future. Without control of the data, you lose opportunities and trust with your customers.
With MXaccess, the data provider can easily see the intermediaries your consumers have connected to. You have insights into where these requests are coming and how many customers are connecting to different data recipients—apps for lending, personal finance, money movement and more.
You’ll have insights into what gaps your customers are seeking outside of your ecosystem—places where they’re engaging with other products and services that help make their financial lives better. And with this information, you’re positioned to form new, mutually beneficial partnerships.
We’re helping organizations, regardless of size, enable and deploy their own credential-free API connections. Embracing the future of open finance and open banking begins with enabling truly secure, consumer-permissioned data sharing.
Because MX’s vision is to keep the financial institutions at the center of the data-sharing experience for their customers, MXaccess provides a customer-consent dashboard that gives customers visibility and control over where they’ve shared their data and the ability to revoke access at any time.
This experience builds trust with customers and turns your institution into their primary digital relationship. Trust needs to be at the center of your experience. In a recent study, we found that Millennials and Gen Z users rank trust and transparency as more important than other factors such as rates, products and services.
At MX, we’re driving toward an open financial ecosystem, one that helps financial institutions increase trust, manage risk, and enable the exchange of customer data that improves outcomes and financial health. Learn more about the MXaccess open finance solution.
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