Financial institutions generate a huge amount of data, especially with the growing adoption of digital payments. These data can be used to create more efficient prediction models and perform more precise calculations. The data is personal and contains information about the individual. This is why laws and regulations such as the GDPR in Europe or the California Consumer Privacy Act (US) restrict the sharing of customer data by financial institutions.
Sharing financial information is important for a wide range of reasons such as better fraud detection and speedier application processes. You can also avail more services and products, such as credit cards and loans by sharing your financial information. It is essential to select an entity you can trust should you decide to share your financial information. Reputable companies, apps and financial service providers must be able to clearly explain the reasons behind your data sharing, as well as the specific partners they will cooperate with in sharing your data.
The most important factor in unlocking the full potential of financial data aggregation is creating an open and unified data ecosystem that enables different users to perform different operations with no unnecessary risks. Securely accessing and process data in real time is crucial, as is a clear understanding of the role each user plays. To achieve this, you need effective security controls for data access that provide an appropriate balance between security and utility, with a focus on allowing live financial information to be transferred between departments as well as between companies while ensuring the rights of the customer.