Understanding CFPB Section 1033 — Establishing Consumer Financial Data Rights in the Unite...
October 22, 2024 | 8 min read
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Fintech companies are changing the financial world at an accelerated rate. And while fintech terms can be complicated, they are important to understand whether you’re a consumer, a business, or an outside observer. In part 1 of this series, we discussed fintech definitions from A to D. Now in part 2, we break down key definitions of fintech terms from E to M.
A term used to classify financial products or services that are offered by businesses outside traditional banks or credit unions — specifically to optimize and facilitate the use of their services seamlessly and securely everywhere their customers are. This customized experience provides consumers with a personalized approach to their finances.
You can see examples of this in grocery stores offering credit cards, PFM tools, or the recently-popular method of 1-click payments found in restaurants or small businesses.
The Financial Data Exchange (FDX) is a nonprofit organization dedicated to unifying the financial industry around a common, interoperable and royalty-free standard for the secure access of financial data, aptly named the FDX API.
The FDX standard puts the needs of consumers first. Enabling people to see all their data in one place benefits customers, financial institutions, and fintechs. For businesses, it creates greater visibility into their customers to provide more personalized recommendations, products, and services to meet their needs.
This encompasses all data related to financial activities, including account balance, transaction data, etc. This is the subtle “currency” of the fintech industry, with entire companies built around the utilization of financial data. Financial data should be secure, with consumers deciding when and where they’d like to share that information with companies.
Broad term that encompasses all financial institutions and systems that make up the financial industry. This is a constantly evolving environment with new innovations that prompt the start of new businesses, drive change for consumers, and force businesses to adapt or die.
Commonly accepted term for financial technology used to describe technology related to financial services or the broader industry of financial technology companies. Fintech is used by both businesses and consumers as the mechanism for better managing financial operations, processes, and software.
The use of computer systems that are able to learn and adapt without following explicit instructions by using algorithms and statistical models to analyze and draw inferences from patterns in data. This is beneficial for fintech because it can be used to identify patterns, make continuous improvements, handle multi-dimensional data, and be used for a wide range of applications.
October 22, 2024 | 8 min read
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