Forbes
The Great Data Debate: A MX Point Of View
By Scott Harkey
Aug. 17, 2021

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At its core, MX is a financial data platform and data aggregator that links data providers (banks, fintechs and beyond) with data consumers (both fintechs and some of those same banks). In addition to data connectivity, MX also provides data enhancement and management services that make the data consumable by third parties. 

The release of a sweeping executive order from President Biden last month re-kindled the flames in the Great Data Debate with the inclusion of language aimed to “open” banking in the US.  The order was not specific, but simply directed banks to “allow customers to take their financial transaction data with them to a competitor.” This direct reference to open banking has set the stage for the acceleration of legislation, policy making, and industry change that is likely to come into play from agencies like the CFPB. 

This announcement is just one example of the industry shift happening around consumer financial data. Earlier this year I began exploring the financial data sharing ecosystem with a specific focus on identifying the major actors and the role they play. Each of these stakeholders has taken a different position on topics ranging from who actually owns the data (consumers vs financial institutions) to how, and if, regulation should occur. As part of the series, I recently spoke with Jane Barratt, Chief Advocacy Officer of MX to better understand how MX views the landscape and the role they play in it.

Who is MX

MX was founded in 2010 by Ryan Caldwell and Brandon Dewitt to change the way consumers interact with their money. “We are a B2B2C company, so our customers are financial institutions, fintechs and any organization with financial and transactional data. Data is our core business, but it’s much more than simply moving data from point a to point b. A big part of what we do is taking raw, unstructured data and making sense of it for our customers and for consumers. Ultimately, it’s about helping organizations use financial data to grow their business and deliver intelligent, automated, and personalized experiences that drive positive outcomes for their customers. So the role that we play in the ecosystem is taking what has been a behind-the-scenes view of data and bringing it to life to benefit both companies and the end consumer,” says Barratt.

At its core, MX is a financial data platform and data aggregator that links data providers (banks, fintechs and beyond) with data consumers (both fintechs and some of those same banks). In addition to data connectivity, MX also provides data enhancement and management services that make the data consumable by third parties. This important step is often overlooked when discussing the exchange of financial data, but without it, the data is often unusable due to poor formatting and inconsistent merchant categorization. 

MX’s customers then use the data to create new experiences like money management services or digital wallets and provide the end consumer insights on how they are spending their money and ways to better manage it. The current move towards embedded finance means MX’s services are in demand now more than ever with businesses ranging from dog walking companies to wholesale marijuana suppliers embedding banking products into their experiences. Financial services permeate every vertical imaginable and many believe the best money management experience is the one embedded in the app you are already using. 

One thing that has always differentiated MX is the collaborative approach they have taken within the industry, including with the banks they are often pulling data from. “We have a long history of working with financial institutions and we understand what it takes to provide a great customer experience and customer outcomes. We are definitely oriented towards collaborating with the ecosystem to enable better outcomes, rather than  working to circumvent the system. Our approach has always been - and will always be - collaborative.”

This collaborative approach also carries through into how MX is approaching regulation. The company recently hired Lexi Hall, a well respected policy advisor formerly with the Senate Banking Committee, as Director of Public Policy. According to Barratt, Lexi plays a key role in their approach to working with regulators. “There are a number of industry working groups, non-profits, customer advocacy groups that are all moving in the same direction and having someone in DC at the center of those conversations adds significant value. We're thrilled to have her on board to impact outcomes for our customers, partners and end consumers.” 

When it comes to actual legislation, Barratt adds, “One of the big roles we could see from a legislative approach is the introduction of the consumer data right - we see that as the North Star. We also believe there should be more oversight of financial data generally. We have unapologetically raised our hand and said groups like ours should have regulatory oversight. We believe that regulation - with clear guidelines - would bring additional clarity on what it will take to make a consumer whole. Right now, because of Reg E, each financial institution is left holding the baby in case of a breach - resulting in each institution creating their own set of downstream obligations, which in turn makes the entire ecosystem more complicated because each bank has different liability rules.”

Barratt continues, “Lastly, data parity or minimum data standards is really important. This is a key role of the Financial Data Exchange - ensuring commonality around what data is actually available. We submitted a comment around the advance notice of proposed rulemaking (ANPR) for Dodd-Frank 1033 and those were main things that we really pushed for within that ANPR.”

MX’s comment on Dodd-Frank Section 1033 reflects their belief that consumers should have secure access to their financial data.  “We truly believe that core to our mission of empowering the world to be financially strong - the first critical step is ensuring that consumers have secure data access to their financial data.”

So How About Akoya?

One of the newest entrants in the data sharing landscape is the bank owned data services company Akoya. I recently covered how Akoya sees their role in the ecosystem, and the organization ultimately sees themselves as a connector of data suppliers to data providers. Many believe that Akoya is actually a competitive threat to the existing data aggregators like MX due to the fact that Akoya would like to see MX, Plaid, and others connect to itself as a way to access the data available from banks and brokerages. Not surprisingly, MX sees things slightly differently.

“Financial services is an enormous industry and it takes a massive collaborative effort to foster innovation and row in the same direction. The industry led approach has been successful in the US to date, and there are innovations across the ecosystem that have accelerated adoption significantly. Akoya has a role in the ecosystem of moving connectivity forward, and they've done a great job of advocating for safe and secure data sharing. 

We applaud everybody's efforts but we need to be very cognizant that there should not  be a single point of failure in the financial services data ecosystem. Concentration of risk in the US ecosystem has generally been a non-starter. And with the rapidly increasing rate of change, and pace of innovation, it is going to take collaboration across the board for the US to truly lead.”

The subtle warning to Akoya likely means there is plenty still to be decided in the role they are ultimately able to play in the ecosystem.

Where Do We Go From Here

The world of financial services is changing and consumers increasingly expect to be able to connect their bank data to third party services. It is no longer a question of if banks ‘should’ make that data available, it’s now all about ‘how’ they do so. MX has positioned itself as a facilitator of these new third party experiences, but clearly believes it’s up to the entire ecosystem to help provide that ultimate customer experience. According to Barratt, “What we care about is, regardless of where someone chooses to bank, transact or invest, they should have safe and secure access to their data,transparency as to what's happening with it and the ability to manage and revoke access at any time. It’s going to take the entire ecosystem to make this happen.”

Read the article on Forbes.com here.