The history of account aggregation has been fraught. Early API standards throughout the 1990s and 2000s struggled to get widespread adoption and regular maintenance, while screenscraping continues to be frowned upon — especially when not whitelisted — by many financial institutions. Because of this, consumers have too often struggled to access their own data in ways that they’ve wanted. For instance, instead of being able to sign into a personal financial management app and see all their accounts in one place, they’ve had to reconnect their accounts over and over again, sometimes to the point that the whole thing doesn’t seem worthwhile.
As the use cases for open banking become more apparent, the demand for a new approach to aggregation becomes clearer. Lenders can use account connections to instantly validate funding and identity, landlords can check whether there are sufficient funds in a customer’s account before charging rent (thereby avoiding bounce-back fees), and retail bankers can ensure that the funding and verification process is seamless and secure — just to name a few examples.
The truth is that account aggregation has been in need of a rehaul for decades, and as people start to understand the possibilities that are available with open banking they’ll be more likely to demand this new approach, an approach we call modern connectivity.
Modern connectivity provides access to tokenized, credential-free API connections built with the highest security standards. These modern connections intelligently route customers to the best experience for each connection and provide the ability to approve, manage, and revoke access to their financial data.
Features of Modern Connectivity
- Tokenized, credential-free connections that use OAuth 2.0 protocols
- Solutions at each level of integration: infrastructure level, API level, aggregation level, and the UX level, giving a full value chain delivery model
- Intelligent routing to a host of connectivity methods for complete coverage and an enhanced user experience
- Developed and deployed quickly
The appeal of modern connectivity becomes clear in contrast with the legacy approach of screen scraping, which is less secure (as customers must share credentials) and intermediary controlled.
Fortunately, the number of modern connections is growing quickly via internal APIs that tie together tech stacks and external APIs that allow financial services companies to easily launch open banking initiatives so they can control and permission who has access and what they have access to. These partnerships enable millions of calls that are tokenized, credential-free connections — all of which represent the future of account aggregation.
To learn more, read the white paper “A New Approach to Financial Account Aggregation: Modern Connectivity.”