Read 5 reasons why you shouldn’t wait to move forward on your open finance strategy and get ready for 1033.

Want to talk more? Our team is ready to engage with you at any stage of your open finance journey. Whether you are beginning to build your API or optimizing your strategy for 1033 compliance, Data Access is your solution. 

Read 5 reasons why you shouldn’t wait to move forward on your open finance strategy and get ready for 1033. 

How to Achieve 1033 Compliance and Gain a Competitive Advantage

We&rsquo;re now nearly 60 days out from the final <a href="https://www.mx.com/blog/cfpb-dodd-frank-section-1033/#what-is-1033">Section 1033</a> ruling from the Consumer Financial Protection Bureau (CFPB). Like most financial institutions who are considered data providers under the final rule &mdash; those who provide covered data under Regulation E or Regulation Z accounts, you&rsquo;re probably asking several key questions like:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">What does the final Section 1033 rule mean for me?</li>
<li style="font-weight: 400;" aria-level="1">Do we really need to worry about this now?</li>
<li style="font-weight: 400;" aria-level="1">Will everything change based on the recent election results?</li>
</ul>
<blockquote>
&ldquo;&hellip;the institutions that adopt Open Banking and compete to deliver the best experience will be more likely to earn consumer loyalty and engagement for the long term.&rdquo; -Jane Barratt, MX Chief Advocacy Officer
</blockquote>
<h2>Don&rsquo;t Wait to Move Forward</h2>
At MX, we hear these questions every day and we&rsquo;re here to help. Bottom line: Don&rsquo;t wait to move forward on your open finance strategy and get ready for 1033. Here&rsquo;s why:&nbsp;
<h3>1. Open Finance isn&rsquo;t about you &mdash; it&rsquo;s about the consumer. </h3>
The CFPB states the final rule is meant to enable consumers to &ldquo;more easily switch to providers with superior rates and services. By fueling competition and consumer choice, the rule will help lower prices on loans and improve customer service across payments, credit, and banking markets.&rdquo; Consumers have more choice &mdash; <a href="https://www.mx.com/research/consumer-research-digital-and-mobile-banking/">and more accounts</a> &mdash;&nbsp;across different financial providers&nbsp;than ever. This shift encourages everyone in the financial data ecosystem to innovate for consumers, helping attract and retain them as consumers. Offering the best third-party connectivity builds loyalty and helps institutions thrive in a competitive market.&nbsp;
<h3>2. Open Finance can create a clear competitive advantage. </h3>
<a href="https://www.openbankingexpo.com/features/feature-open-banking-in-the-us-a-new-era-of-consumer-centric-innovations/">Jane Barratt recently said</a>, &ldquo;Institutions of any size that think of Section 1033 as a regulatory stick instead of a competitive carrot are at risk of being left behind.&rdquo; Consumers want their providers to know them. They want personalized products, services, and offers. And, they want a good mobile and digital experience. But, most financial institutions are missing key details on where consumers share data. <a href="https://www.mx.com/blog/what-is-open-finance/">Open finance</a> data unlocks the door to gain better insights about competitor products your customers utilize and create precise targeting and compelling offers.&nbsp;
<blockquote>
Data providers who start now with Open Finance will be in a better position to deliver on consumer expectations and will have the advantage over those who choose to wait.
</blockquote>
<h3>3. Political climates may shift but Open Finance is here to stay.&nbsp; </h3>
In light of the results of the recent U.S. election, rumors are circling on what changes may affect the CFPB. Section 1033 has received broad bipartisan support from the start and we should expect to continue to execute against the final rule. And, regardless of regulation, Open Finance and consumer-permissioned data sharing are here to stay. Institutions should focus on how Open Finance can help drive competitive advantages for them and better outcomes for consumers.&nbsp;
<h3>4. API-based connectivity is the future. </h3>
Consumer-permissioned <a href="https://financialdataexchange.org/FDX/News/Press-Releases/Financial_Data_Exchange__FDX__Reports_76_Million_Consumers_Use_FDX_API.aspx">data sharing is already widely adopted</a> across the United States. And, it&rsquo;s clear that the industry is shifting away from screen scraping. This is the only path forward. And, it&rsquo;s what consumers are asking for from their providers. When asked what they would do if their bank or credit union didn&rsquo;t support connecting to their favorite fintech apps, <a href="https://www.mx.com/research/consumer-research-digital-and-mobile-banking/">72% said they would switch to one that does.</a> Data providers need to take seriously their responsibility to their consumers to provide secure and reliable connectivity.
<h3>5. Open Finance can lead to greater innovation and financial wellness. </h3>
The imperative of Open Finance is to connect the world&rsquo;s financial ecosystem to revolutionize financial wellness for consumers. This will continue to be the drumbeat to which MX marches &mdash; and it creates a win-win scenario for both consumers and financial institutions. It helps put the right financial solutions in the hands of the right consumers at the right time while also fueling higher deposits and income for financial providers so they can pour more energy into innovation that moves the industry forward.
<h2>Where to Get Started for Data Providers: Your Quick Guide to Key Requirements</h2>
We&rsquo;re making it as easy as possible for you to understand key requirements as a data provider under Section 1033. [<a href="https://www.mx.com/guides/1033-data-provider-quick-guide/" target="_blank" rel="noopener">Download our full quick guide</a>] and in the meantime, here&rsquo;s a quick overview of core responsibilities, what to consider for data partners, and where MX can help:&nbsp;
<h3>Core Data Provider Responsibilities&nbsp;</h3>
Under the final rule, data providers are responsible for enabling both consumers and third parties to access data, with key requirements related to:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1"><a href="https://files.consumerfinance.gov/f/documents/cfpb-1033-nprm-reg-text-with-1001_2023-10.pdf#page=8">Covered Data</a>: Covered Data: Ensure covered data is available in an accessible electronic format via a performant developer interface (API) for all qualifying third-party requests.</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://files.consumerfinance.gov/f/documents/cfpb-1033-nprm-reg-text-with-1001_2023-10.pdf#page=10">API Management: </a>Maintain the developer interface at required performance standards, provide advance notice of downtime, and publish API documentation.</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://files.consumerfinance.gov/f/documents/cfpb-1033-nprm-reg-text-with-1001_2023-10.pdf#page=10">Third-Party Management:</a> Respond to third-party requests with accurate data or a reason for denial, document denials, and provide guidelines for accessing the developer interface.</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://files.consumerfinance.gov/f/documents/cfpb-1033-nprm-reg-text-with-1001_2023-10.pdf#page=17">Analytics and Reporting</a>: Publish monthly performance data for the developer interface and maintain compliance records.</li>
<li style="font-weight: 400;" aria-level="1">Consent Management: While data providers are not obligated to manage consumer consent or to provide consent revocation tools under Section 1033, data providers can choose to confirm consent and provide revocation tools, consistent with current industry best practices. If so, key requirements include developing a system to manage consumer consents, enabling easy revocation of third-party access, and ensuring reauthorization every 12 months.</li>
</ul>
<h3>Evaluating Data Partners </h3>
Choosing the right open banking partner is critical for delivering seamless financial experiences. Here are a few key criteria to consider when evaluating potential open banking data partners:
<ul>
<li aria-level="1">Interoperability: Choose partners committed to connecting with all data intermediaries and maintaining a robust, open network.</li>
<li aria-level="1">API Quality: Look for reliable, fast, and well-documented APIs using FDX standards that are easy to integrate. </li>
<li aria-level="1">Consent: Quality partners use clear, consent flows and, where appropriate, allow data providers to manage consent if they choose to do so. </li>
<li aria-level="1">Privacy: Choose a partner with strong encryption, compliance certifications, and clear data policies.</li>
<li aria-level="1">Innovation: Ensure partners can adapt quickly to regulatory changes and market trends.</li>
<li aria-level="1">Partnership: Find a collaborative partner, not just a vendor, that can offer strong support, customization, and a growth mindset.</li>
<li aria-level="1">Reputation: Assess a partner&rsquo;s credibility through client success stories, industry recognition, and reliable reviews.</li>
</ul>
<h3>How MX Can Help&nbsp;</h3>
For more than a decade, MX has been a leader in open finance and consumer-permissioned data sharing. Our <a href="http://mx.com/products/data-access">Data Access</a> solution combines an API platform that meets FDX standards with built-in analytics that can help you meet your 1033 compliance obligations and provide you with actionable intelligence at the same time.&nbsp;
Here&rsquo;s why you should consider MX as your data partner:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">MX partners with you to build your API. With Data Access, your APIs are translated to FDX standards. Our team guides you through creation, testing, and launch, while our self-serve tools empower you to unlock the full potential of open banking.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">MX is an intermediary. This allows us to actually test your API with you. We&rsquo;ve seen this significantly speed up the process to launch your API and reduce any potential errors.</li>
<li style="font-weight: 400;" aria-level="1">Data Access scales your APIs across multiple intermediaries. Data Access follows FDX standards which are designed to guarantee interoperability across the ecosystem. This allows data providers to scale APIs and manage all intermediaries effortlessly in a central portal.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Data Access delivers real-time analytics on data sharing. Data Access is the leading platform that surfaces real-time reports about all of the data your consumers share. You will better understand your customers&rsquo; needs, what products they are utilizing from your competitors, and have the ability to build precise targeting and segmentation for compelling offers.&nbsp;</li>
</ul>
<img src="https://cms.mx.com/assets/d5e3d8c3-5f03-4568-8fd6-73b5a4bbdfb6?width=3897&amp;height=2508" alt="Data Access Image" />
See our detailed <a href="https://www.mx.com/guides/1033-data-provider-quick-guide/" target="_blank" rel="noopener">Quick Guide to 1033 Requirements for Data Providers</a> to learn more about key responsibilities and how MX can help meet and go beyond compliance requirements.&nbsp;

How Data Providers Can Compete and Comply: Achieving 1033 Compliance and Gaining a Competitive Advantage

MX is excited to share that Founder Ryan Caldwell has returned to the company as Chief Executive Officer.

Caldwell founded MX in 2010 with a mission he and Co-Founder Brandon Dewitt established that continues today — empowering the world to be financially strong.

MX Announces Return of CEO and Founder Ryan Caldwell

Today, MX is excited to share that Founder Ryan Caldwell has returned to the company as Chief Executive Officer, effective immediately. Ryan has been serving as the Executive Chair of the MX Board of Directors since stepping down as CEO in 2021.
In late 2021, Caldwell made the difficult decision to step aside as CEO to focus on his daughter&rsquo;s health. She is doing much better and getting stronger every day, making it the right time for Ryan to return as CEO. We are excited to welcome Ryan back to MX in a full-time capacity.&nbsp;
&ldquo;I am excited to return to MX at such a pivotal moment for both the company and the industry, as financial institutions and fintechs look to leverage consumer-permissioned financial data to grow deposits, increase innovation, and deliver new products and services that strengthen outcomes,&rdquo; said Caldwell. &ldquo;We have an incredible team and opportunity ahead of us to innovate faster and enable real, tangible benefits for consumers and the financial providers that serve them.&rdquo;&nbsp;
Caldwell founded MX in 2010 with a mission he and Co-Founder Brandon Dewitt established that continues today &mdash;&nbsp;empowering the world to be financially strong. MX does this by delivering the industry&rsquo;s most robust and reliable connectivity, data enhancement, and experience solutions to financial services providers.
Additionally, we are excited to share that Chief Technology Officer Wes Hummel will take on an expanded role leading both the MX product and technology teams.&nbsp;

MX Founder Ryan Caldwell Returns as Chief Executive Officer

Here’s 5 key insights from our survey of 1,000+ U.S. consumers that financial providers should consider to increase engagement.

Here’s 5 key insights from our latest survey of 1,000+ U.S. consumers that financial providers should consider to increase consumer engagement. 

Increase Consumer Engagement With Intuitive Money Management Tools

Our latest research shows 25% of U.S. consumers feel completely financially secure today. And, more than half (56%) of respondents say they will be financially secure someday.&nbsp;
But, while they may feel optimistic for the future, they are still worried about the everyday costs of groceries, housing, and more continue to rise due to inflation. And, they may be stuck in old ways when it comes to solving these feelings of financial insecurity.&nbsp;
<blockquote>
&ldquo;In today&rsquo;s increasingly challenging economic environment, it&rsquo;s interesting to see a majority of consumers still relying on manual processes &mdash; adding more burden and potentially stress to managing their finances,&rdquo; shares Jane Barratt, Chief Advocacy Officer and Head of Global Public Policy, MX.&nbsp;
</blockquote>
Financial institutions and fintechs have an opportunity to play a bigger role in helping consumers achieve financial security by relieving the mental burden with proactive, personalized notifications and intuitive money management tools that can do the heavy lifting for them.&nbsp;
Here&rsquo;s 5 key insights from our latest survey of 1,000+ U.S. consumers that financial providers should consider in meeting this opportunity head on:
<h2>1. Consumers still turn to manual bill pay methods over automation. </h2>
When asked what most closely aligns with how they pay bills on a monthly basis, 40% of all respondents say they prefer to manually view and pay each bill every month to keep track of their finances. An additional 24% say they manually pay each bill to make sure they have the funds available.&nbsp;
<h2>2. Incentives could drive consumers to change their payment habits. </h2>
While the majority of consumers (51%) prefer to keep their payment methods the same for convenience, more than one-third (36%) would consider switching if they received an incentive.
<h2>3. The keys to direct deposit switching are rates and rewards. </h2>
When asked if they have ever switched their direct deposit to a different financial institution, the majority (65%) say no. But, nearly half say the top factors that are most likely to make them switch are the ability to earn higher interest rates (22%) or receive cash back incentive or offer to earn rewards for switching (22%).&nbsp;
<h2>4. Personalization is critical. </h2>
Consumers are looking for a financial provider that knows them and puts that knowledge into practice through personalized insights and tools. Forty-nine percent of consumers expect their financial provider to know them. And, 47% of consumers expect greater levels of personalization in banking than ever before. 
<h2>5. Actionable intelligence drives higher engagement and even more data. </h2>
More than half expect their financial provider to leverage the data they have about them to personalize their experience (53%) and provide them with actionable and clear insights about their finances (56%). What&rsquo;s more &mdash;&nbsp;consumers will share even more data if it results in a better experiences.&nbsp;
To read the full report, please visit: <a href="https://www.mx.com/research/driving-engagement-for-consumers-research/">https://www.mx.com/research/driving-engagement-for-consumers-research/</a>

How to Encourage Consumers to Use New Money Management Approaches 

Financial data intelligence makes financial data actionable to increase engagement, improve results, and drive growth.

Financial data intelligence is the ability to make financial data actionable to increase engagement and loyalty, improve results, and drive growth. 

What is Financial Data Intelligence? Definitions and Benefits

In this post, we will cover: 
<ul>
<li><a href="#what-is-financial-data-intelligence">What is Financial Data Intelligence?</a></li>
<li><a href="#definitions">Financial Data Intelligence vs. Data Analytics, and Other Terms</a></li>
<li><a href="#how-financial-data-intelligence-works">How Financial Data Intelligence Works</a></li>
<li><a href="#benefits-financial-data-intelligence">Benefits of Financial Data Intelligence</a></li>
</ul>
<h2 id="what-is-financial-data-intelligence">What is Financial Data Intelligence?&nbsp;</h2>
Vast amounts of consumer financial data are generated daily by each and every consumer. One transaction alone can mean dozens of data points. As a result, banks, credit unions, fintechs, and other financial providers are sitting on mountains of financial data.&nbsp;
However, the majority of financial institutions and fintechs don&rsquo;t have a good way to unlock the value of this data to drive better business and consumer outcomes. But, data is just data. You need to <a href="https://www.mx.com/guides/2024-digital-banking-playbook/">create an actionable step</a> for your customers.
That&rsquo;s where financial data intelligence comes into the picture. Financial data intelligence is the ability to make financial data actionable to increase engagement and loyalty, improve results, and drive growth.&nbsp;
<h2 id="definitions">Financial Data Intelligence vs. Data Analytics, and Other Terms</h2>
Financial data intelligence is a term specific to how organizations leverage consumer financial data. It is a subset of a broader term &mdash;&nbsp;data intelligence, which is used across many industries such as retail, healthcare, manufacturing, etc., when talking about deriving actionable insights from data. Data intelligence is the tools and methods that organizations use to better understand the data they collect, store, and utilize to improve their products and/or services.&nbsp;
Other organizations may refer to similar terms including data analytics and business intelligence when referring to how they analyze data. However, we think data analytics misses a key component that is present with data intelligence: making it actionable. Analysis without action is simply interesting information. To create true data intelligence, the data and insights must be actionable.&nbsp;
<blockquote>
Analysis without action is simply interesting information. To create true data intelligence, the data and insights must be actionable.&nbsp;
</blockquote>
Another similar term that is worth mentioning is &ldquo;<a href="https://en.wikipedia.org/wiki/Financial_intelligence">financial intelligence</a>.&rdquo; What is financial intelligence? It&rsquo;s defined as gathering information about the &ldquo;financial affairs of entities of interest, to understand their nature and capabilities, and predict their intentions.&rdquo; It&rsquo;s often used in conjunction with an investigation of a specific entity by law enforcement or related agencies. In fact, the United States government has an <a href="https://en.wikipedia.org/wiki/Under_Secretary_of_the_Treasury_for_Terrorism_and_Financial_Intelligence">under secretary position within the Department of the Treasury</a> dedicated to terrorism and financial intelligence.&nbsp;
<h2 id="how-financial-data-intelligence-works">How Financial Data Intelligence Works</h2>
It starts with being able to effectively <a href="https://www.mx.com/products/connectivity/">connect</a> to, understand, and act on consumer financial data.&nbsp;
<h3>Connecting the Dots</h3>
Today&rsquo;s <a href="https://www.mx.com/research/what-consumers-want-from-financial-providers/">average consumer has 3 to 5 financial accounts</a> with various banks, credit unions, and other financial providers. It&rsquo;s messy for consumers to manage and makes it increasingly difficult for financial providers to get a full picture of consumers&rsquo; financial lives.&nbsp;
This disjointed <a href="https://www.mx.com/money-experience/">money experience</a> creates blindspots for organizations when it comes to delivering the right products and services to meet consumer needs, targeting consumers with the right messages, and accurately predicting and preventing churn.&nbsp;
By enabling consumers to easily connect and view all of their finances in one place with <a href="https://www.mx.com/products/account-aggregation/">financial account aggregation</a>, it not only helps consumers better manage their money but gives financial providers more visibility into consumer financial data.&nbsp;
<h3>Understanding the Data</h3>
As we stated earlier, data is just data. It requires context, cleansing, and categorization to ensure both consumers and organizations can leverage data to its fullest extent.&nbsp;
With cleansing and categorization, raw data becomes clear transaction information. And, with added context, transaction data becomes more insightful and actionable for consumers. <a href="https://www.mx.com/products/data/">Enhanced data</a> also makes it easier to unlock the value of financial data and enable better decisions, improve efficiency, and uncover new opportunities.
<h3>Creating Actionable Insights and Personalized Experiences</h3>
The last piece of the puzzle is how you leverage the data to <a href="https://www.mx.com/blog/personal-data-in-exchange-for-personalized-experiences/">create personalized experiences</a>, deliver proactive insights, and drive engagement and growth.&nbsp;
Financial data intelligence combines connected and enhanced data with the power of artificial intelligence, machine learning, and advanced analytics. It helps financial service providers to increase engagement with consumers by delivering insights and recommended actions to help them on their financial journey and surface new insights and areas of opportunity to drive growth.&nbsp;&nbsp;
<div style="padding: 56.25% 0 0 0; position: relative;"><iframe style="position: absolute; top: 0; left: 0; width: 100%; height: 100%;" title="Financial Data Intelligence Promo - Sachi - March 2024" src="https://player.vimeo.com/video/928032801?h=4c12f88c79&amp;badge=0&amp;autopause=0&amp;player_id=0&amp;app_id=58479" frameborder="0"></iframe></div>
<h3>The Benefits of Financial Data Intelligence&nbsp;</h3>
Simply put: with actionable financial data intelligence, financial providers can increase engagement and loyalty, acquire more customers, and identify growth opportunities. And, financial providers can help their customers better understand and manage their finances.&nbsp;
Here&rsquo;s a look at our top 10 benefits of financial data intelligence:&nbsp;
<ol>
<li style="font-weight: 400;" aria-level="1">Acquire and retain more customers with <a href="https://www.mx.com/products/connectivity/">reliable connectivity solutions</a>, <a href="https://www.mx.com/products/data/">enhanced data</a>, and <a href="https://www.mx.com/products/experience/">personalized digital experiences</a>.</li>
<li style="font-weight: 400;" aria-level="1">Increase consumer engagement and adoption by delivering <a href="https://www.mx.com/products/financial-insights/">personalized financial insights</a> and recommended actions.</li>
<li style="font-weight: 400;" aria-level="1">Surface areas of opportunity to increase deposits, expand <a href="https://www.mx.com/use-cases/account-opening/">account openings</a>, and engage with your customers.</li>
<li style="font-weight: 400;" aria-level="1">Improve financial health by enabling consumers to better understand and manage their finances with <a href="https://www.mx.com/products/personal-financial-management/">Personal Financial Management (PFM) tools</a>.</li>
<li style="font-weight: 400;" aria-level="1">Deliver the right message, to the right person, at the right time to<a href="https://www.mx.com/products/customer-analytics/"> improve ROI and marketing campaign effectiveness</a>.</li>
<li style="font-weight: 400;" aria-level="1">Predict and prevent churn with a better understanding of trends and behaviors</li>
<li style="font-weight: 400;" aria-level="1">Increase customer satisfaction and loyalty with <a href="https://www.mx.com/products/experience/">personalized experiences</a> that meet consumers where they are.</li>
<li style="font-weight: 400;" aria-level="1">Optimize business processes by breaking down data silos and making it easier to unlock the value of financial data.</li>
<li style="font-weight: 400;" aria-level="1"><a href="https://www.mx.com/case-studies/becu/call-center/">Reduce call center volume</a> and customer frustration by making data easily understandable and actionable.</li>
<li style="font-weight: 400;" aria-level="1">Accelerate innovation and product enhancements based on actionable data about product adoption, usage, and behaviors.</li>
</ol>

What is Financial Data Intelligence? How it Works, Key Definitions & Benefits

Key takeaways from the Experience Generation Next report on how to serve consumers of each generations in the coming years,

Read key highlights from Experian’s Generation Next report and how to meet consumer needs in the next decade and beyond.

Understanding Different Generational Customer Needs

Meeting the needs of customers requires financial providers to constantly evolve their offerings to address the shifting sands of the generational landscape. In an increasingly competitive landscape, it is no longer enough for financial providers to simply meet consumers where they are. Financial providers need to get there first &mdash; creating experiences that will deliver what consumers need, when they need them.&nbsp;
By anticipating upcoming financial milestones for consumers, financial providers can develop competitive strategies to win new customers and keep them for the long haul. Experian's latest <a href="https://www.experian.com/thought-leadership/business/generation-next-key-generational-insights" target="_self">Generation Next report</a> highlights key trends and milestones on the horizon for each generation:
<h2>Upcoming Generational Milestones&nbsp;</h2>
<img class="enlargeable" src="https://cms.mx.com/assets/d15ab0f1-cae8-46be-a228-be89ae129c43?width=1200&amp;height=615" alt="Image (31)" />
Gen Z Reaches Independent Credit Eligibility
At 18 years old, U.S. consumers are eligible to apply for credit independently &mdash;&nbsp;and the majority of Gen Z will reach this milestone in the next 5 years. More than 21 million Americans will turn 18 in the next 5 years, presenting a tremendous opportunity for banks and credit providers to establish new relationships with these consumers. How can you win their business? Focus on strong <a href="https://www.mx.com/products/mobile-banking/">mobile banking</a> experiences, seamless digital <a href="https://www.mx.com/use-cases/account-opening/">account opening</a> processes, and integrating with contactless payment options.&nbsp;
Millennial Home Buyers
Home ownership is a huge financial milestone and many Millennials are rapidly approaching the average age of first-time homebuyers &mdash; 38 years old. In order to successfully navigate this milestone, first-time Millennial home buyers will seek out new financial products and services to help them build their credit. In fact, credit-building products remain most popular among Millennials. By offering <a href="https://www.mx.com/products/financial-insights/">personalized insights</a> to guide them and products that help build their credit now, you can become a trusted financial provider that they turn to when it&rsquo;s time to buy a home.
Gen X Readies for Retirement
While most of Gen X is still several years away from retirement, the first wave of Gen X will reach the average age of retirement in the next 5 years. And, even for those further away from retirement, it is certainly on their mind. <a href="https://www.mx.com/research/financial-apps-fall-short/">MX research</a> shows that the top financial goal in 2025 for Gen X is to save for retirement. However, at the same time, Experian&rsquo;s report shows Gen X has the highest annual expenditures, spending more than $25,000 annually than their largely retired Baby Boomer counterparts. Financial providers have an opportunity to win Gen X customers by offering <a href="https://www.mx.com/products/personal-financial-management/">financial wellness tools</a> and insights that can help them track their spending today and save for the future.&nbsp;
Baby Boomers Require a Human Touch
Unsurprisingly, Baby Boomers are retiring at an earlier age and spend more on healthcare than their younger counterparts. More than half of this generation also still prefers brick and mortar bank branches to learn about new products and services &mdash; and places strong importance on human interactions when purchasing financial products (64% say it is extremely or very important). Financial institutions should consider these factors in how they approach targeted messaging and offers to support this generation, ensuring personalized insights and personal touches are at the forefront.&nbsp;
<h2>Understanding Trends Doesn&rsquo;t Replace Understanding Your Customers</h2>
With any trend reports like this, it is easy to make assumptions about what each generation will want and when they will want it. But, it is crucial to meet every assumption with data, otherwise your strategies will be designed for the customers you think you have rather than the ones you actually have. There is an important distinction between thinking you know your customer and actually knowing them.&nbsp;
Everyone is different. Every generation is different. But, more importantly, managing money is a very personal thing. Every person, regardless of generation, will view things slightly differently. This is why putting the data consumers choose to share with financial providers into action is so critical. And, consumers expect it. In fact, <a href="https://www.mx.com/research/financial-apps-fall-short/">our research shows</a>:
<ul>
<li style="font-weight: 400;" aria-level="1">55% agree they would give their financial provider access to more of their data if they knew it would result in a better experience.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">58% agree they expect their financial provider to leverage the data they have about them to personalize their experience.</li>
<li style="font-weight: 400;" aria-level="1">65% agree they expect financial institutions to use the data they have about them to provide them with actionable and clear insights about their finances.&nbsp;</li>
</ul>
Are you putting consumer-permissioned data to work for you and your customers? Join our upcoming <a href="https://www.mx.com/product-forums/harness-data-drive-growth">Product Forum on April 29</a> to see how MX can help.

Are You Evolving with Generations of Consumers? 

What is financial wellness and why does it matter? See how financial institutions can promote financial wellness.

Financial wellness is the ability to comfortably manage one’s finances and build better habits.

What Is Financial Wellness? Definitions, Benefits, and Examples

Families in the U.S. are wealthier than ever &mdash; with total family wealth quadrupling between 1989 and 2022, according to <a href="https://www.cbo.gov/publication/60807">a report from the Congressional Budget Office</a>. But this newfound wealth distribution has been anything but equal. The top 10% of households have 60% of the wealth.
<a href="https://www.mx.com/research/financial-apps-fall-short/">According to MX research</a>, 44% of consumers say they struggle to make ends meet. The stress of money and the widening wealth gap make prioritizing financial wellness more important now than ever before &mdash; for both consumers and their financial providers.
So what is financial wellness and why does it matter? This blog will answer every question about financial wellness and how financial institutions can help:
<ul>
<li><a href="#what-is-financial-wellness">What Is Financial Wellness?</a></li>
<li><a href="#examples-of-financial-wellness">Examples of Financial Wellness</a></li>
<li><a href="#financial-wellness-and-well-being">What Is the Difference Between Financial Wellness and Financial Well-Being?</a></li>
<li><a href="#benefits-of-financial-wellness">Benefits of Financial Wellness</a></li>
<li><a href="#financial-providers-promote-financial-wellness">How Financial Providers Can Promote Financial Wellness</a></li>
<li><a href="#mx-empowers-financial-wellness">How MX Empowers Financial Providers</a></li>
</ul>
<h2 id="what-is-financial-wellness">What Is Financial Wellness?</h2>
A quick search for &ldquo;what is financial wellness&rdquo; turns up many results &mdash; without a single agreed-upon definition.&nbsp;
<a href="https://www.mx.com/research/financial-apps-fall-short/">MX asked consumers how they define financial wellness</a> and, unsurprisingly, the results were widespread&nbsp; &mdash;&nbsp;and influenced by their past, present, and future. Financial wellness means different things to different people but each definition has a common thread: how well a person manages their money, if certain financial needs are met, and financial comfort. 
<img src="https://cms.mx.com/assets/82661b41-ad70-4db1-9465-d84cdc2bedfe?width=3891&amp;height=1698" alt="Asset 1@4x" />
The <a href="https://www.americanbanker.com/opinion/banks-should-embrace-new-tools-for-measuring-consumer-financial-health">Office of the Comptroller of the Currency</a> (OCC) gives a more practical definition of financial wellness: &ldquo;having stable day-to-day finances, resilience to withstand shocks, and security for the future.&rdquo;&nbsp;
Rolling all of these definitions into one, financial wellness is defined as the ability to comfortably manage one&rsquo;s finances.
Check out our blog <a href="https://www.mx.com/blog/consumers-define-and-measure-financial-wellness/">Metrics and Mindsets: How Consumers Define and Measure Financial Wellness</a> to learn more about how different genders and generations view financial wellness.
<h2 id="examples-of-financial-wellness">Examples of Financial Wellness</h2>
Because financial wellness is influenced by our past, present, and future, consumers can see practical application in each of these areas. Here are some examples of financial wellness practices for consumers:
<h3>Debt Management</h3>
Understanding our past money habits can help consumers on their journey towards financial wellness. Financial wellness can mean keeping debt at manageable levels or completely paying off debt.
<h3>Daily Spend Stability</h3>
Financial wellness is also about everyday money habits. Consumers should strive to live within their means. Budgeting and paying bills in full and on time can help consumers to control their daily spend &mdash; promoting financial wellness.&nbsp;
<h3>Emergency Preparedness</h3>
Nineteen percent of consumers find that being able to save for the future defines financial wellness, <a href="https://www.mx.com/research/financial-apps-fall-short/">according to MX</a>. Consumers can look towards the future with emergency preparedness in mind. Being proactive about savings, contributing to retirement accounts, and setting financial goals are examples of financial wellness.
<h2 id="financial-wellness-and-well-being">What Is the Difference Between Financial Wellness and Financial Well-Being?</h2>
Financial health, financial well-being, and financial literacy are all commonly used in conversations surrounding consumers and their ability to manage their finances effectively. Now that we&rsquo;ve defined financial wellness, what is financial well-being? Financial well-being is the ability for a person to effectively meet all of their financial obligations.&nbsp;
Financial wellness and financial well-being are 2 phrases can generally be used interchangeably. They all have the same goal, emphasizing the importance of proper financial management and how it can impact consumers.
<h2 id="benefits-of-financial-wellness">Benefits of Financial Wellness</h2>
Financial wellness is a powerful goal. It&rsquo;s a cause that will provide long-term benefits to consumers and financial institutions. Financially strong consumers lead to financially stronger businesses and communities. When people have the tools, resources, and knowledge to improve their financial health, it creates a win-win scenario for all parties involved.
Financial providers that invest in <a href="https://www.mx.com/use-cases/financial-wellness/">financial wellness tools</a> will be able to connect with their customers on a deeper level and contribute to higher levels of financial well-being. This translates to higher customer engagement, retention, and loyalty &mdash;&nbsp;and drives business growth, higher deposits, and long-term stability.&nbsp;
<h3>Benefits of Financial Wellness for Consumers</h3>
Able to Manage Day-to-Day Expenses
Financial wellness can benefit consumers right away. Fifty-five percent of consumers report that they are currently living paycheck to paycheck, <a href="https://www.mx.com/research/driving-engagement-for-consumers-research/">MX recently discovered</a>. Financial wellness can help consumers prepare for and handle upcoming everyday expenses to get out of the paycheck to paycheck cycle.
Prepare for the Future
Financial wellness can teach consumers important skills like saving, budgeting, and investing. Consumers that prioritize their financial health will become more prepared financially for unexpected life events. Ultimately, financial wellness will empower consumers to make more informed financial decisions that will have a lasting impact.
Mental and Physical Health
Fifty-one percent of consumers say money is their main source of stress, <a href="https://www.mx.com/research/financial-apps-fall-short/">according to MX research</a>. Financial wellness helps consumers to limit the stress caused by financial issues, offering them a greater sense of optimism and security. Because <a href="https://www.cuimc.columbia.edu/news/link-between-health-and-financial-well-being">health and financial well-being are connected</a>, investing in financial wellness can give consumers more fulfilling lives.
<h3>Benefits of Financial Wellness for Financial Providers</h3>
Stronger Customer Retention
There is rigorous competition within the financial services industry. So if a consumer doesn&rsquo;t like something about their financial provider, they are more than willing to find one that is a better fit for them. In fact, <a href="https://www.mx.com/research/the-missing-link/">MX found that</a> 57% of consumers said they&rsquo;d likely seek out a new financial provider if their current one couldn&rsquo;t deliver on these most wanted features. Financial providers must be willing to increase their service offerings so that consumers are more willing to stick around long term.
Increased Deposits
Banks, credit unions, and other financial providers that work to promote financial wellness will have consumers that are financially healthier, making them more likely to pay off their loans and increase their deposits.
Data-Driven Insights
Financial institutions that partner with consumers on their financial journeys will gain access to greater insights based on additional consumer-permissioned data. This data&rsquo;s power is two-fold. Banks will be able to better understand their customers, while also using that information to offer more relevant products and services that will help them to retain customers.
<h2 id="financial-providers-promote-financial-wellness">How Financial Providers Can Promote Financial Wellness</h2>
According to the <a href="https://finhealthnetwork.org/research/financial-health-pulse-2023-u-s-trends-report/">Financial Health Network</a>, 47% of unbanked households were considered financially vulnerable. Banks have the opportunity to turn the financially vulnerable population around through financial wellness promotion.
Financial providers should rethink how they are approaching financial wellness and its accessibility for their consumers. Thanks to today&rsquo;s advances in technology across the financial industry, financial institutions have easier access to the tools that promote financial wellness. There are various ways that providers can promote financial wellness:
Connect the Dots
Do your consumers know where their finances stand? Financial wellness is nearly impossible without full visibility into financial accounts. The majority of consumers have various financial apps, so switching between them is an inefficient way to fully understand their financial state. By implementing an <a href="https://www.mx.com/blog/what-is-open-banking/">open banking solution</a> to help consumers connect the dots across their various financial accounts, they&rsquo;ll gain a 360-degree view of their finances.
Leverage Data to Better Engage and Inform
Even centralized financial data can be messy and hard to understand at times. Financial institutions that prioritize <a href="https://www.mx.com/blog/what-is-data-enhancement/">data enhancement</a> will empower consumers to better understand their finances. Likewise, banks and credit unions will have more clarity into the data to tailor the right messages for the consumers at the right time.
Engage Through Personalization
Every consumer is different, so they should be treated that way. Understand who your customers are through their data and engage with them appropriately. Give your customers <a href="https://www.mx.com/products/financial-insights/">proactive insights</a> or nudges to better manage spending, pay down debt, or increase savings based on their account activity. These insights can empower your customers to recognize how they can make more informed financial decisions.
Nudge Consumers to Action
Your consumers are sharing high amounts of information with you. Use it to your advantage. Did they recently connect a new account? Have they opened up a mortgage? Could they benefit from a <a href="https://www.mx.com/case-studies/global-credit-union/winning-the-fight-for-deposits/">deposit switch</a>? With the right tools, you can understand more about your customers and act accordingly with targeted offers and services &mdash; helping you gain primacy.
<h2 id="mx-empowers-financial-wellness">How MX Empowers Financial Providers</h2>
<a href="https://www.mx.com/research/financial-apps-fall-short/">MX found</a> that 31% of consumers don&rsquo;t feel financial providers do enough to support their financial needs. What can they do to better meet customer expectations? Jane Barratt, MX Chief Advocacy Officer, offered the solution when she said, &ldquo;Data, or the lack thereof, can make or break financial wellness.&rdquo;
MX helps financial institutions connect, analyze, engage, and act on <a href="https://www.mx.com/blog/what-is-consumer-permissioned-data/">consumer-permissioned data</a> to create better customer experiences. MX&rsquo;s suite of <a href="https://www.mx.com/use-cases/financial-wellness/">financial wellness tools</a> can help you make the most of your financial data. Discover <a href="https://www.mx.com/case-studies/verabank/">how MX helped VeraBank transform financial wellness</a> across its customer base for a 65% increase in engagement.

What Is Financial Wellness and Why It’s Not Just Important for Consumers

Check out these recommendations for what to keep in mind when standing up an open banking API.

See how MX’s Data Access solution can support your open banking future!

As <a href="https://www.mx.com/blog/what-is-open-banking/">Open Banking</a> adoption continues to accelerate, financial institutions of all sizes are exploring the right approach to standing up and maintaining open banking APIs.&nbsp;
MX has been a leader in <a href="https://www.mx.com/blog/what-is-open-finance/">Open Finance</a> and <a href="https://www.mx.com/blog/what-is-consumer-permissioned-data/">consumer-permissioned data</a> sharing for more than a decade, working with financial providers and fintechs to implement APIs that enable the permissioned flow of data. Here are three things to consider when standing up an open banking API:
<h3>1. Data is a Two-Way Street</h3>
Financial institutions have traditionally had an aversion to sharing their customers&rsquo; financial data, often seeing it as the loss of a competitive edge. But, that mindset is outdated as open banking adoption accelerates. The flow of data can &mdash; and should &mdash;&nbsp;be a tide that rises all boats.&nbsp;
By enabling the two-way flow of data, financial institutions are able to better understand customer needs, streamline processes, and deliver better products and services. This includes everything from empowering better and faster onboarding through instant account verification to generating relevant and actionable insights that can improve a consumer&rsquo;s financial life.&nbsp;
Financial institutions shouldn&rsquo;t be afraid of data leaving their institution. Instead, they should think about the value they gain as a data provider &mdash;&nbsp;better insights into where consumers are turning for their financial needs outside of their organization.
The flow of data along consumer-permissioned channels increases insights and intelligence that can be used by financial providers on both ends of the exchange.&nbsp;
<h3>2. Don&rsquo;t See Compliance as a Hassle</h3>
Compliance and third-party risk management teams at a financial institution are integral to effectively standing up an open banking API. However, these stakeholders are often brought into the process too late.&nbsp;
Compliance and risk management need to be considered from the beginning. This will facilitate alignment across departments, streamline due diligence processes by engaging early and often, and ensure that the end result is a more secure way for consumers to manage their data.&nbsp;
More broadly, as <a href="https://www.mx.com/blog/cfpb-dodd-frank-section-1033/">open banking regulations</a> take shape, it could be easy for financial institutions to view compliance obligations as a hassle or hindrance. However, there are opportunities for financial institutions that see compliance as more than checking a box. For example, consumers want their providers to know them but, most financial institutions are missing key details on where consumers share data. Open banking data gives you better insights about competitor products that your customers utilize and enables you to create precise targeting and compelling offers.&nbsp;
<h3>3. Keep Consumers at the Center</h3>
Consumers own their financial data and should have the ability to control who has access to it. <a href="https://www.mx.com/research/financial-apps-fall-short/">MX research</a> confirms this &mdash; 80% of consumers agree it is important for them to know and manage who has access to their financial data. Financial providers need to keep this perspective at the center of their API implementations.&nbsp;
Whether building or buying an API, financial institutions should focus on facilitating secure, seamless connections that allow consumers to connect to a broad range of banks and fintechs, dynamically revoke access to their data, and educate them on the values and risks associated with sharing their data with third parties.&nbsp;
Ultimately, standing up a successful open banking API means embracing the opportunities that Open Banking presents rather than merely meeting obligations.

Opportunity over Obligation: Considerations for Standing Up an Open Banking API

Community banks are cornerstones of local economies and provide a personalized touch to essential financial services.

MX recently submitted a comment letter to the U.S. House Financial Services Committee in response to its "Make Community Banking Great Again" principles. 

Why Community Banks Matter and Balancing Policies

At MX, we deeply value the critical role that community banks play in the financial well-being of individuals and the growth of small businesses across the nation. Community banks and credit unions are not just places to store money &mdash;&nbsp;they are cornerstones of local economies and provide a personalized touch to essential financial services, fostering strong relationships that are particularly vital in underserved areas. Their dedication to understanding and meeting the unique needs of their communities is fundamental to a vibrant and inclusive financial system.
That's why we recently submitted a comment letter to the Honorable Members of the House Financial Services Committee in response to their recently published "Make Community Banking Great Again" principles.&nbsp;
For the past 14 years, MX has been a proud partner to numerous community banks and credit unions across the United States. Their survival, economic prosperity, and ability to effectively serve their customers are of paramount importance to us. But, community banks are disappearing through consolidation, acquisition, or closure.&nbsp;
Our mission to build financial strength for individuals, communities, and the world becomes harder in local communities that rely on these community banks to support their economy, small businesses, and citizens. We have a vested interest in ensuring the regulatory and economic landscape enables them not just to persist, but to flourish in an increasingly competitive environment.
Our letter highlighted several key areas where we believe thoughtful policy and regulatory approaches can significantly benefit community banks and the communities they serve. Here&rsquo;s a summary of the key points we conveyed to the Committee:
<h2>1. The Importance of Tailored Regulation</h2>
We strongly support the Committee's principle advocating for the re-establishment of tailoring in prudential regulation and supervision. A one-size-fits-all approach fails to recognize the fundamental differences between community banks and large, complex institutions, often disproportionately burdening smaller banks and forcing them to divert resources from their core mission.
We emphasized that regulatory scrutiny should be commensurate with the actual risk posed to consumers. We highlighted the significant differences between non-secure data sharing practices that can lead to breaches and fraud, and the <a href="https://www.mx.com/products/data-access/">secure, permissioned data access</a> facilitated by MX. Our technology empowers consumers to control their data, utilizing secure APIs that enhance security and enable personalized financial experiences. We urged regulators to recognize this fundamental difference in risk profiles when crafting regulations.
<h2>2. Fostering Innovation Through Clear Supervisory Expectations</h2>
MX wholeheartedly agrees with the Committee's emphasis on regulators being open to innovation while upholding safety and soundness, and ensuring they possess the technical skills for effective supervision. Innovation, particularly through partnerships with fintech companies like MX, is crucial for community banks to modernize their offerings and remain competitive.
Clear and consistent regulatory guidance regarding third-party relationships, including those with fintechs, is vital for fostering responsible innovation. As the House Financial Services Committee recently pointed out in a <a href="https://financialservices.house.gov/uploadedfiles/2025-03-28_interagency_letter_1.pdf">letter</a> to Federal banking agencies, lack of clarity in this area can stifle the adoption of new technologies. We also highlighted the increasing need for regulators to develop expertise in emerging technologies like <a href="https://www.mx.com/blog/ai-in-financial-services/">artificial intelligence (AI)</a> to provide effective oversight that encourages innovation while protecting consumers.
<h2>3. Periodic Review of Cumulative Regulatory Impact</h2>
We support the call for federal prudential regulators to conduct periodic reviews of the cumulative impact of their regulations. Regularly assessing the overall effects of the regulatory landscape can identify unintended consequences, inefficiencies, and areas for improvement.
These reviews should specifically address any overlapping or conflicting requirements across different regulatory agencies that can lead to unnecessary costs and compliance challenges for community banks. Regulatory clarity is paramount for promoting commercial growth and fostering innovation, allowing community banks to allocate resources more effectively towards serving their customers and communities.
<h2>4. Balancing Efficiency and Competition in Bank Merger and Acquisition Review</h2>
MX recognizes the importance of a timely and efficient regulatory review process for bank merger and acquisition applications. However, we also stressed the critical need to balance efficiency with the potential adverse effects on competition that can arise from increased consolidation within the banking sector.
The significant decline in the number of community banks over the past two decades underscores the importance of carefully considering the impacts of consolidation, especially given the vital role these institutions play in serving small businesses and local communities. While a 120-day timeframe for review may enhance efficiency, it is crucial that regulators have sufficient time to thoroughly assess the potential impact on competition, small business customers and the continued viability of community banks.
<h2>Looking Ahead</h2>
MX appreciates the House Financial Services Committee's focus on the challenges and opportunities facing community banks. These institutions are an indispensable part of our financial ecosystem, and their continued evolution and success is vital for the well-being of communities across the nation.
We remain committed to being a supportive voice and a valuable resource in ongoing discussions about how to improve the economic and innovation landscape for community banks. By working together, policymakers, regulators, and industry stakeholders can create an environment where community banks can thrive, continue to serve their communities effectively, and embrace innovation to meet the evolving needs of their customers.

Why Community Banks Matter — and the Need for the Right Policy Approach

A 101 dive into what customer segmentation is and how if applies to banking and financial services.  

Customer segmentation is the process of dividing a customer base into smaller groups to better understand the trends, habits, and needs of each group.

What is Customer Segmentation in Banking?

Consumers have grown to expect personalized and tailored experiences from their financial providers. And, they are ready to share their data in exchange for more relevant experiences.
In fact, MX research found that <a href="https://www.mx.com/research/financial-apps-fall-short/">55% of U.S. consumers</a> agreed they would give their financial provider access to more of their data if they knew it would result in a better experience. But, if they share their data, they expect financial providers to actually use it.&nbsp;&nbsp;
<blockquote>
65% of U.S. consumers agree they expect their financial institutions to use the data they have on them to provide them with actionable and clear insights about their finances.
</blockquote>
One-size-fits-all approaches don&rsquo;t meet this expectation. Financial providers need to leverage the data that consumers share to create effective customer segmentation to meet their unique needs.&nbsp;
In this post, we&rsquo;ll cover:
<ul>
<li><a href="#what-is-customer-segmentation">What is Customer Segmentation?</a></li>
<li><a href="#why-is-customer-segmentation-important">Why is Customer Segmentation Important in Banking?</a></li>
<li><a href="#benefits">Benefits of Customer Segmentation</a></li>
<li><a href="#mx-support">How Does MX Support Customer Segmentation?</a></li>
</ul>
<h2 id="what-is-customer-segmentation">What is Customer Segmentation in Banking?</h2>
Customer segmentation is the process of dividing a customer base into smaller groups using a variety of shared characteristics. It helps businesses better understand the trends, habits, and needs of each group.&nbsp;
With customer segmentation, businesses can target and message their customers based on demographic, geographic, psychographic, and/or behavioral characteristics. By segmenting customers according to specific needs, preferences, and behaviors, businesses can more effectively tailor their marketing, products, and services. It helps companies know and reach the right customer base with the right message, product, or service at the right time. Consumers can occupy multiple segments and segments change and evolve over time as consumer behavior and needs change.&nbsp;
Within banking, <a href="https://www.mx.com/blog/what-is-consumer-permissioned-data/">customer-permissioned financial data</a> enables financial institutions and fintechs to segment customers based on characteristics such as spending affinities, risk tolerance, credit history, income, spending and savings habits, investments, financial management behaviors, etc.&nbsp;
<h2 id="why-is-customer-segmentation-important">Why is Customer Segmentation Important in Banking?</h2>
Customer segmentation is a valuable tool for any industry, but none more so than financial services. The <a href="https://www.mx.com/money-experience/">money experience</a> is deeply personal. Each consumer has a different set of circumstances, goals, and life moments that influence the financial products and services they want and need.&nbsp;&nbsp;
Customer segmentation allows financial providers to deliver more personalized messages, offers, and experiences at scale for consumers. And, with the rise of <a href="https://www.mx.com/blog/what-is-open-banking/">Open Banking</a>, financial providers have access to more consumer-permissioned data than ever to understand customers on a deeper level and segment accordingly.&nbsp;&nbsp;&nbsp;
<h2 id="benefits">Benefits of Customer Segmentation in Banking</h2>
Customer segmentation improves financial products and services in a variety of ways that benefit both the consumer and business.&nbsp;
<h3>Benefits for Consumers</h3>
Some examples of benefits customer segmentation provides consumers are:
1. More Personalized Products and Services
Segmentation ensures that financial institutions offer products that suit the specific needs and goals of different consumer groups. For instance, consider the needs of different generations: Gen Z customers who&rsquo;ve recently graduated may benefit from an offer to refinance their student loans while Baby Boomers who have been out of school for some time would likely not benefit from this same offer.
The more data a financial provider has, the more they can use customer segmentation to tailor products and services to meet specific needs. This means consumers get exactly what they need, instead of being overwhelmed with options that don&rsquo;t apply to them.
2. Increased Customer Satisfaction
When financial institutions understand a customer&rsquo;s needs, behavior, and preferences, they can provide more relevant experiences, which improves customer satisfaction and loyalty. Consumers may receive tailored financial advice, faster and more informed responses to questions, and better services that support a consumer&rsquo;s financial goals.&nbsp;
3. Improved Financial Advice
Navigating finances is challenging and many consumers struggle to do so on their own. <a href="https://www.mx.com/research/financial-apps-fall-short/">MX research</a> found 50% of consumers see money as their main source of stress and 44% say they struggle to make ends meet. Whether in boom or bust, consumers want their financial providers to offer personalized advice on next steps. Customer segmentation helps financial providers offer more relevant advice to a wide range of customers.&nbsp;&nbsp;
4. More Relevant Offers and Promotions
Instead of receiving generic marketing offers, consumers benefit from receiving deals and promotions that actually make sense for them. If you&rsquo;re a recent college graduate, for example, you might get offers for first-time homebuyer loans or low-fee credit cards, rather than irrelevant offers targeted at different groups.
<h3>Benefits for Financial Providers</h3>
Examples of the benefits of customer segmentation for financial institutions are:
1. More Effective Marketing and Communications&nbsp;
Even a financial provider with the best products and services will still struggle if they fail to put them in the hands of the consumers at the opportune moment. By marketing specific and tailored campaigns based on customer segmentation data, financial providers get relevant and actionable insights into the hands of their customers when they need it.&nbsp;
2. Boost Cross-Selling Opportunities
Segmentation allows financial institutions to identify opportunities for cross-selling relevant products to their customers. As customers progress in their lives and financial journeys, they move through different segments and their needs change. By understanding how individuals progress through segments, financial providers can meet consumers where they are and provide actionable insights for their customers&rsquo; next steps.&nbsp;
3. Improved Engagement, Retention, and Loyalty
Personalized services, relevant product offerings, and proactive customer support help build stronger relationships, which in turn increases customer loyalty. Satisfied customers are more likely to engage and remain with the institution for the long term, increasing satisfaction and reducing churn.
4. Optimized Product Development
By analyzing customer segments, financial institutions can identify gaps in the market and develop new products tailored to specific groups. By actively assessing customer segmentation data and looking for trends and changes, financial institutions can have a head start on where the industry is headed and be the first to market with new products and services that will serve customers in the future.&nbsp;
<h2 id="mx-support">How Does MX Support Financial Institutions with Customer Segmentation?</h2>
At MX, we believe that by leveraging consumer-permissioned data, we can help empower the world to be financially strong. This belief is reflected in the products and tools we create to help financial providers deliver better money experiences to consumers.&nbsp;
For instance, our <a href="https://www.mx.com/products/customer-analytics/">Customer Analytics</a> solution enables financial institutions to surface deeper insights about their customers with world-class data, clear segmentation, and unified data sets. It combines consumer-permissioned and enhanced transaction data into a centralized, comprehensive set of intelligent models, dashboards, and analytics tools all of which can be easily embedded into marketing automation platforms and CRMs. Our approach enables a new way to retrieve data and break analytics down to a set of actionable attributes.
<blockquote>
"...Having the data is just the beginning &mdash; you have to do something with it. Those who can effectively drive that next action will see tremendous results." &mdash;<a href="https://thefinancialbrand.com/news/deposits/most-financial-institutions-have-a-data-problem-not-a-deposit-problem-187874?mx-content-portal">&nbsp;Billy Gast</a>, Senior Director of Mobile and Experiences Products at MX
</blockquote>
MX also helps financial providers transform that data into action &mdash; with personalized insights, proactive recommendations, and more.

What is Customer Segmentation? Benefits, Examples in Banking

MX is working with Candescent and Gemini AI models on a new proof of concept to provide personalized experiences for consumers.

MX works with Candescent and Gemini AI models on a new proof of concept to enable faster, easier personalized messages to consumers. 

Personalization at Scale with MX, Candescent, and Gemini AI Models

Generic marketing messages often fail to resonate with customers &mdash;&nbsp;alienating them with impersonal, irrelevant offers instead of driving them to take action. In fact, half of consumers report receiving marketing emails or direct mail from financial institutions at least once a month or more often. However, the majority of consumers (67%) have not taken action from any, <a href="https://www.mx.com/research/driving-engagement-for-consumers-research/">according to MX&rsquo;s research</a>.&nbsp;
Financial providers that seek to strengthen relationships and build trust with customers must deliver highly-tailored messages to each person at the right time. This means financial providers must truly understand where each customer is in their financial journey in order to personalize their experience.
However, getting a clear picture of what consumers want &mdash;&nbsp;and translating that into high-impact messaging and marketing campaigns &mdash;&nbsp;isn&rsquo;t always easy. Nearly every organization has a complicated diagram of how they&rsquo;re piecing disparate data sources together across different tools to try and create relevant marketing and messaging.&nbsp;
MX is working with Candescent and Gemini AI models on a new proof of concept. Soon, financial providers will be able to use Candescent as a singular solution with new integrations to MX&rsquo;s <a href="https://www.mx.com/products/customer-analytics/">Customer Analytics</a> solution and Gemini models. They will also be able to use Gemini for Google Workspace to streamline tasks and workflows.&nbsp;
Here&rsquo;s how it works:
<h2>Making Sense of the Data&nbsp;</h2>
Using MX&rsquo;s Customer Analytics, financial institutions can surface deeper insights about their customers with world-class data, clear segmentation, and unified data sets. Customer Analytics combines consumer-permissioned and enhanced transaction data into a centralized, comprehensive set of intelligent models, dashboards, and analytics tools all of which can be easily embedded into marketing automation platforms and CRMs. Our approach enables a new way to retrieve data and break analytics down to a set of actionable attributes.
<h2>Simplifying Campaign Management</h2>
With a better understanding of each segment composition, financial providers are then able to leverage Gemini models to generate promotional images or other marketing assets using artificial intelligence &mdash; all embedded within the Candescent Promotion Suite. This allows organizations to go from insights to execution quickly and efficiently.&nbsp;
<img src="https://cms.mx.com/assets/289e8a15-f27c-4dd1-90d4-4017df9f3f2f?width=1920&amp;height=807" alt="MX and Candescent Proof of Concept" />
Speed to market is imperative and financial providers must be able to communicate with each customer at the moments that matter most. What was a traditionally cumbersome process is now centralized, intelligent, and seamless so financial services organizations can reach their customers with the right message faster.&nbsp;&nbsp;
This exclusive solution is only available to Candescent clients and is expected to be available in early 2025.

A New Era of Personalization in Financial Services is Almost Here: MX Puts Data into Action with Candescent and Google Gemini

FDX is the recognized standard for Open Finance API and enables transparent, secure, user-permissioned data sharing and utilization.

MX is a proud member of FDX, promoting Open Finance API standards to enable transparent, secure, user-permissioned data sharing and utilization.


What Is FDX and Why Does It Matter? | MX Blog

Today&rsquo;s world is ruled by data. Financial institutions, fintechs, big tech, and other companies leverage consumer financial data to create products, services, recommendations, and campaigns. Unfortunately, financial data isn&rsquo;t always collected through methods where the consumer is in control.
Consumer financial data access and control has historically been left up to the financial institutions, fintechs, and other third parties involved. While this approach has provided the groundwork for many innovations, it left consumers lacking the control, transparency, and security they so clearly want.&nbsp;
According to <a href="https://www.mx.com/research/financial-apps-fall-short/">MX&rsquo;s latest survey</a> of 1,000+ American adults, 80% of U.S. adults agree that it is important for them to know and manage who has access to their data. In addition, nearly half (49%) of U.S. consumers agree they would freely share their data if they knew it was securely protected. Consumers are showing us what they want from their data &mdash;&nbsp;control, transparency, and security.
MX has always been an advocate that consumers should be in control of who can access their data. We believe consumers should be able to easily grant or revoke access at any time. An <a href="https://www.mx.com/blog/what-is-open-finance/">open finance</a> ecosystem puts consumers in the driver seat. And, it enables smarter, faster, and more reliable money experiences.&nbsp;
Organizations like the <a href="https://www.financialdataexchange.org/">Financial Data Exchange</a> (FDX) are crucial to moving the industry forward, setting the standard for secure consumer-permissioned data sharing. 
In this post, we will cover:
<ul>
<li><a href="#what-is-fdx" target="_self">What is the Financial Data Exchange (FDX)?</a></li>
<li><a href="#what-does-fdx-api-include" target="_self">What does the FDX API include?</a></li>
<li><a href="#why-fdx-standards-matter" target="_self">Why FDX Standards Matter</a></li>
<li><a href="#consumer-benefits" target="_self">How FDX Standards Benefit Consumers</a></li>
<li><a href="#business-benefits" target="_self">How FDX Standards Benefit Businesses</a></li>
<li><a href="#what-role-does-fdx-play" target="_self">What Role Does FDX Play in Play in Open Finance?</a></li>
<li><a href="#implementing-open-finance" target="_self">Implementing Open Finance</a></li>
</ul>
<h2 id="what-is-fdx">What is the Financial Data Exchange (FDX)?&nbsp;</h2>
FDX is a non-profit industry standards body dedicated to unifying the financial services ecosystem around common, interoperable, and royalty-free technical standards for<a href="https://www.mx.com/blog/what-is-consumer-permissioned-data/"> user-permissioned financial data sharing</a>. Any company within the financial industry can contribute to the development, growth, and adoption of the FDX API and other objectives.
FDX is centered around<a href="https://financialdataexchange.org/FDX/About/About-FDX.aspx?WebsiteKey=deae9d6d-1a7a-457b-a678-8a5517f8a474&amp;hkey=dffb9a93-fc7d-4f65-840c-f2cfbe7fe8a6&amp;a315d1c24e44=1#a315d1c24e44"> five core data sharing principles</a> that empower users:
<ol>
<li style="font-weight: 400;" aria-level="1">Control</li>
<li style="font-weight: 400;" aria-level="1">Access</li>
<li style="font-weight: 400;" aria-level="1">Transparency</li>
<li style="font-weight: 400;" aria-level="1">Traceability</li>
<li style="font-weight: 400;" aria-level="1">Security</li>
</ol>
With <a href="https://www.financialdataexchange.org/FDX/FDX/News/Announcements/FDX%20Hits%2094%20Million%20Accounts,%20CFPB%20Publishes%20FDX's%20Standard-Setting%20Application.aspx#:~:text=Standard%2DSetting%20Application-,FDX%20Hits%2094%20Million%20Accounts%2C%20CFPB%20Publishes%20FDX's%20Standard%2DSetting,our%20Fall%20Adoption%20Metrics%20Survey.">more than 94 million consumer accounts</a> using the FDX API, the largest financial institutions and fintechs in the financial ecosystem widely adopt the FDX API standards.
FDX is governed by a diverse board of directors from across the financial services ecosystem, and FDX has a global membership that includes financial institutions, financial data aggregators, fintechs, industry utilities, payment networks, consumer groups, financial industry groups and other stakeholders involved in user-permissioned financial data sharing. Today, MX&rsquo;s Chief Advocacy Officer and Head of Public Policy Jane Barratt serves as the <a href="https://www.financialdataexchange.org/FDX/News/Press-Releases/MX%20Chief%20Advocacy%20Officer%20Jane%20Barratt%20Named%20Financial%20Data%20Exchange%20(FDX)%20Co-Chair.aspx">co-chair of the FDX Board of Directors</a>.&nbsp;
Is your organization a member of the<a href="https://www.businesswire.com/news/home/20220627005029/en/Financial-Data-Exchange-FDX-Reports-32-Million-Consumer-Accounts-on-FDX-API-to-Power-Open-Banking-and-Open-Finance"> 200 financial industry leaders</a> innovating the financial ecosystem?<a href="https://financialdataexchange.org/"> Learn more here</a>.
<h2 id="what-does-fdx-api-include">What does the FDX API include?</h2>
FDX&rsquo;s open finance standards provide a comprehensive toolkit for building interoperable APIs. It is the culmination of over 600 components related to sharing personal financial data, helping to keep consumer data safe by eliminating the need to share credentials with third parties. The FDX API includes three components:
<ol>
<li style="font-weight: 400;" aria-level="1">Security standards for authentication and authorization</li>
<li style="font-weight: 400;" aria-level="1">Specified recommendations for the user experience in selecting a data provider and throughout the user&rsquo;s financial data sharing journey</li>
<li style="font-weight: 400;" aria-level="1">Use-case specific data structures and endpoints</li>
</ol>
The FDX API is available on the FDX website without charge for parties that accept the terms and conditions of the FDX API License Agreement.&nbsp;
<h2 id="why-fdx-standards-matter">Why FDX Standards Matter</h2>
FDX standards put the consumer&rsquo;s needs first. Enabling consumers to easily connect their accounts to see all of their data in one place creates positive outcomes for consumers and businesses alike. This is the promise of Open Finance.
<a href="https://www.mx.com/blog/what-is-open-finance/">Open Finance</a> enables access and sharing of consumer data to even more financial products and services &mdash; not just banking, like<a href="https://www.mx.com/blog/what-is-open-banking/"> Open Banking</a>. This includes loans, consumer credit, investments, and pensions. It also enables wider integration of financial data with non-financial industries, such as healthcare and government. In Open Finance, consumers can grant trusted third parties access to their entire financial footprint for better experiences and personalized solutions to improve financial wellness.
<h3 id="consumer-benefits">How FDX Standards Benefit Consumers</h3>
FDX standards allow consumers to more easily connect their various financial accounts and data together into a single view &mdash; enabling a more seamless money experience. And, with the freedom and flexibility that Open Finance enables, consumers have more choice and control over the data they share and how they engage with their finances. They can gain unparalleled access to a broader range of products and services. 
<h3 id="business-benefits">How FDX Standards Benefit Businesses</h3>
We previously wrote about the power of open access to data for financial institutions, fintechs, and other organizations. It enables:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Better Fraud and Risk Management: By leveraging an open finance API rather than screen scraping, consumers never have to share their username and password, and financial providers eliminate the risk of sharing credentials.</li>
<li style="font-weight: 400;" aria-level="1">More Accurate Customer Profiles: Financial providers can gain access to real-time financial data from their consumers. They can easily see where consumers are sharing their data and why it is being used. This helps identify product and partnership opportunities.</li>
<li style="font-weight: 400;" aria-level="1">Enhanced Customer Experiences: By putting consumers in the driver&rsquo;s seat, financial providers can build trust and improve relationships, leading to greater customer satisfaction and loyalty.</li>
<li style="font-weight: 400;" aria-level="1">Personalized Services: By analyzing their financial data, businesses can identify specific customer needs or preferences and tailor their offerings accordingly. For example, a bank may offer investment opportunities to customers who have a higher disposable income, or provide budgeting tools to those who struggle to manage their finances. By offering more personalized services, businesses can create a stronger connection with their customers, leading to increased loyalty and retention.</li>
<li style="font-weight: 400;" aria-level="1">Data-Driven Decision Making: Businesses can gain insight into trends and patterns that may not have been apparent before. This can help businesses identify new opportunities, optimize their operations, and make more informed decisions about product development and marketing strategies.</li>
</ul>
With greater visibility into their customers, financial providers can provide more personalized recommendations, products, and services to meet their needs. Consistent standards also form a foundation for increased innovation and industry collaboration. 
<h2 id="what-role-does-fdx-play">What Role Does FDX Play in Open Finance?</h2>
For business and consumers to benefit from the advantages of an Open Finance ecosystem, we believe the financial industry needs to embrace <a href="https://www.mx.com/blog/why-interoperability-matters/">interoperability</a>. This means consumer-permissioned data can easily flow from data providers &mdash; often credit unions and banks &mdash; to third-party data recipients (i.e., fintechs and other providers of financial products and services).&nbsp;
The FDX standard helps companies to build interoperable interfaces more easily by establishing clear technical standards that keep data flowing effectively and securely for consumers and businesses. This can help reduce cost, simplify integration with other parties, create more unified and reliable consumer experiences, and aid in regulatory compliance.
The U.S. Consumer Financial Protection Bureau (CFPB) published a final <a href="https://www.mx.com/blog/cfpb-dodd-frank-section-1033/">Section 1033 rule</a> in October 2024 that will give consumers greater control and rights over their personal financial data. While <a href="https://www.mx.com/blog/prioritizing-consumer-outcomes/">next steps are currently uncertain</a> in the face of multiple actions from Administration leaders and multiple lawsuits in the courts, this rulemaking fundamentally changes how consumers can access and share their financial data.&nbsp;As part of this rule, the CFPB calls out the need for &ldquo;consensus standards&rdquo; to meet requirements and a recognized standard-setting organization to help create that consensus. FDX received official recognition by the Consumer Financial Protection Bureau (CFPB) as an <a href="https://www.financialdataexchange.org/FDX/News/Press-Releases/FDX%20Recognized%20by%20CFPB%20as%20a%20Standard-Setting%20Body,%20a%20Step%20Forward%20for%20Open%20Banking.aspx">industry standard-setting body</a> for the U.S. open banking ecosystem in January 2025. FDX is now in the process of updating a consensus standard data format that aligns with relevant portions of the rulemaking and supports compliance.
<h2 id="implementing-open-finance">Implementing Open Finance</h2>
MX believes adopting FDX standards and embracing Open Finance will help build a more<a href="https://www.mx.com/blog/creating-a-fair-and-competitive-financial-environment/"> fair and competitive financial ecosystem</a> that gives consumers more choice in where and how they manage their money, as well as greater insights to take control of their finances.&nbsp;
Adopting FDX standards and embracing<a href="https://www.mx.com/blog/what-is-open-finance/"> Open Finance</a> will enable financial institutions and fintechs to truly empower everyone to be financially strong with access to the right insights and products to support their financial goals.
MX continues to be a driving force at FDX by chairing and collaborating in key task forces and actively engaging on the Board of Directors. MX is also enabling financial institutions of all sizes to accelerate open finance adoption and enhance the money experience for consumers through Data Access.<a href="https://www.mx.com/products/data-access/"> Data Access is an open API platform built on FDX standards</a> that improves time-to-market and reduces costs to deliver secure data sharing, as well as provide the groundwork for greater insights about customer behaviors, trends, and needs. It provides financial institutions with the ability to monitor and manage where consumers are sharing their financial data and the tools to implement a more secure data-sharing experience with token-based connectivity.

Why FDX Matters — Promoting a Standard of Excellence in Financial Services

Many consumers identify money as their top stressor, yet everyone meets the stress of money management differently. 

PYMNTS Intelligence research defines planner and reactor personas for consumers and MX’s research reveals deeper insights. 


MX’s Research Reveals Insights Into PYMNTS’ Consumer Personas

Managing your finances is not always easy, and many consumers identify it as their top stressor. <a href="https://www.mx.com/research/financial-apps-fall-short/">MX&rsquo;s most recent research</a> found more than half of U.S. consumers (51%) agree that money is their main source of stress. But, just because the stress of managing money is common across the board, this does not mean that everyone meets the stress of money management the same way.&nbsp;
<a href="https://www.pymnts.com/study_posts/the-two-money-mindsets-shaping-how-consumers-manage-their-finances/">New research from PYMNTS</a> identified two distinct personas when it comes to how consumers manage their money: reactors &mdash; who take their finances as they come &mdash; and planners that take a proactive approach to managing their finances.&nbsp;
According to PYMNTS, planners are on top of their credit and debt payments, have higher savings balances, and are able to cover emergency expenses as they come. Alternatively, reactors rely more heavily on credit and hold larger credit balances &mdash;&nbsp;and they have less in savings and rely on credit or payday loans to cover emergency expenses.
The report highlights compelling data on who falls into these personas and how understanding the personas can help predict consumer trends. Our <a href="https://www.mx.com/research/financial-apps-fall-short/">most recent survey</a> of 1,000+ U.S. consumers touches on many of the same points &mdash; here&rsquo;s a closer look at some areas where MX&rsquo;s research and the PYMNTS findings overlap:&nbsp;
<h2>How Different Personas Define Financial Wellness</h2>
A key focus of MX&rsquo;s recent survey was how consumers define and measure financial wellness. Here is how consumers answered:
Defining Financial Wellness
More than half of consumers are likely reactors, according to PYMNTS definition. These reactors define financial wellness as being able to pay all of their bills each month (30%) or cover everyday expenses (22%). On the flip side, 48% are planners &mdash; those not worried about unexpected expenses and those focused on saving for retirement. This split closely mirrors how PYMNTS identified consumers &mdash; 42% of consumers fall into the planner persona while 58% are identified as reactors.&nbsp;
<img src="https://cms.mx.com/assets/8a538faa-975f-42b3-bbe5-097ffd8b807b?width=1000&amp;height=990" alt="Financial Wellness Definition" />
Measuring Financial Wellness
When asked what metrics they use to measure their financial wellness, the top metrics consumers say they use can also be split into these two personas:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">Planner: 53% measure financial wellness by their savings account balance.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Reactor: 42% look at their remaining account balance at the end of each month</li>
</ul>
<h2>Generational Differences</h2>
PYMNTS also broke down the reactor and planner personas according to different generations. Younger generations are more likely to be reactors (73% of Gen Z) while older generations have the highest percent of planners.&nbsp;
While it&rsquo;s not surprising that younger generations are more likely to be reactors, you see a more nuanced picture when you look at top financial goals for 2025 from MX&rsquo;s research.&nbsp;
Our research indicates that Gen Z consumers want to plan for the future. The top financial goal among Gen Z respondents this year is saving for a new car (17%), compared to only 2% of Baby Boomers who plan to save for a new vehicle.. And, twice as many Gen Z respondents say their top 2025 financial goal is to buy a new home compared to Baby Boomers (8% versus 4%).
At the same time, while older generations have the resources and experience to fit the planner persona according to PYMNTS, their top financial goals center more on reactive concerns. Nineteen percent of Baby Boomers said their top financial goal is to cover their bills each month and another 17% said to pay off credit card debt. And, the most common answer among Baby Boomers was that they did not have a financial goal for 2025 (23%). Covering expenses and paying off debt are both indicative of the reactor persona and not having a financial goal, maybe more so.&nbsp;
Breaking down key differences between reactor and planner consumers can reveal a lot about how financial providers can support their individual needs. For reactors, financial providers should offer education and services that will help them achieve their financial goals and plan for the future. For planners, financial providers can help them ease the burden of financial planning and enjoy the fruits of years of being a planner. In the end, it all comes back to financial providers knowing their customers better, meeting them where they are, and helping them get where they want to go.

Planners vs Reactors: How Consumers Manage Money 

MX recently responded to the Office of Science and Technology Policy's (OSTP) RFI on the development of an AI Action Plan.

MX recently responded to the Office of Science and Technology Policy's (OSTP) Request for Information (RFI) on the development of an AI Action Plan.

AI in Financial Services: MX Response to OSTP RFI

At MX, we're committed to driving innovation in financial services through data and technology while ensuring that people are empowered and protected. As artificial intelligence (AI) continues to rapidly transform the financial landscape, we believe it's crucial to have thoughtful policies in place that promote responsible AI development and use.
That's why we recently responded to the Office of Science and Technology Policy's (OSTP) Request for Information (RFI) on the development of an <a href="https://www.federalregister.gov/documents/2025/02/06/2025-02305/request-for-information-on-the-development-of-an-artificial-intelligence-ai-action-plan">AI Action Plan</a>. This RFI seeks input from various stakeholders on how to shape the future of AI in the United States.&nbsp;
With 14 years of experience in financial data and working with financial institutions, we have a unique point of view of consumer-centric financial services. Below are some of the key points we made in our submission.&nbsp;
<h2>Data Access is Key to AI Effectiveness</h2>
AI models in financial services rely on high-quality, comprehensive data to be effective. But, many AI models &mdash; particularly in financial services &mdash; can suffer performance challenges due to incomplete datasets.&nbsp;
For instance, the average consumer has at least five or more financial accounts with various banks, credit unions, and other financial providers. This fragmented financial experience can leave consumers &mdash; and the financial providers who serve them &mdash; with blindspots that can negatively impact efforts to improve consumer financial well-being. Without connecting those various accounts and sources of financial data together, organizations can&rsquo;t effectively deliver the products and services that best meet consumer needs.&nbsp;
Comprehensive access to permissioned consumer financial data (such as checking accounts, credit, and investment history) can help AI models to better understand financial behavior, leading to more accurate and consumer-centric guidance and outcomes.
We advocate for modernizing cross agency financial data regulations and oversight to enable secure and consumer-permissioned access to financial data, which will improve the accuracy and fairness of AI-driven financial services.&nbsp;
<h2>Consumer-Centric AI Development</h2>
AI should be designed to prioritize consumer well-being and empowerment. We believe that AI has the potential to revolutionize financial health by helping individuals make informed decisions and achieve their financial goals.
For example, we envision that AI models in financial services will evolve from today&rsquo;s basic insight tools into proactive financial optimization services. A new emerging concept is &ldquo;self-driving finance&rdquo;, where AI agents automatically manage routine financial tasks and even make optimized decisions on behalf of consumers with their consent and guidance. But, these concepts only work if the data supports them. If AI agents are to take action on behalf of consumers or businesses, it is essential that the agent has a 360-degree view of the person&rsquo;s or business&rsquo;s financial situation to ensure the actions it takes are beneficial.&nbsp;
Conversely, if a model has been trained on incomplete, or only publicly available data, the outcomes will be less optimal &mdash; even if a person has shared their 360-degree view of their finances.
<h2>Policy Recommendations</h2>
We recommended several policy actions to the OSTP, including:
<ul>
<li style="font-weight: 400;" aria-level="2">Modernizing financial data regulations to ensure secure, permissioned data access for AI development.</li>
<li style="font-weight: 400;" aria-level="2">Improving coordination between regulatory agencies to ensure consistent standards for data sharing, model governance, and consumer protection.</li>
<li style="font-weight: 400;" aria-level="2">Supporting the development of AI risk assessment and mitigation frameworks to ensure fairness, transparency, and accountability in AI models.</li>
</ul>
<h2>The Future of AI in Financial Services</h2>
We believe that AI has the potential to transform financial services for the better, making them more personalized, accessible, and efficient. By advocating for responsible AI policies, we can help ensure that AI is used to empower consumers and drive positive change in the financial industry.
We're excited to continue engaging with the OSTP and other stakeholders on this important issue. We believe that by working together, we can shape a future where AI is used to create a more inclusive and prosperous financial system for all.

Artificial Intelligence in Financial Services: Emphasizing Innovation, Mitigating Risk

Data intermediaries enable connected, data-driven experiences for consumers.


Financial data intermediaries empower financial institutions to connect their consumer data and create personalized experiences.

What Is a Financial Data Intermediary? Definition and Benefits

The financial industry becomes more complex every day &mdash; and consumers want more from their financial providers. More personalization. More functionality. And, better use of their data.&nbsp;
In fact, 58% of consumers agree they expect their financial provider to leverage the data they have about them to personalize their experience, according to <a href="https://www.mx.com/research/financial-apps-fall-short/">MX research</a>. Consumers also continue to rank the ability to see all of their accounts from various financial providers in one place as the feature they most want for financial wellness. And, they&rsquo;re using this feature. When asked if they have used digital tools to bring their different financial accounts into one view, such as a mobile app or an online account, 41% of consumers say yes.&nbsp;
To enable these connected, data-driven experiences, many financial providers partner with financial data intermediaries to deliver seamless connectivity options for consumers.
In this post, we will cover:
<ul>
<li><a href="#what-is">What Is a Financial Data Intermediary or Open Banking Intermediary?</a></li>
<li><a href="#other-intermediaries">Other Types of Financial Intermediaries</a></li>
<li><a href="#difference">What Is the Difference Between a Financial Data Intermediary and a Data Aggregator?</a></li>
<li><a href="#benefits">Benefits of Financial Data Intermediaries</a></li>
<li><a href="#examples">Examples of Financial Data Intermediaries</a></li>
<li><a href="#find">What to Look for in a Financial Data Intermediary</a></li>
<li><a href="#MX-intermediary">MX as a Financial Data Intermediary</a></li>
</ul>
<h2 id="what-is">What Is a Financial Data Intermediary or Open Banking Intermediary?</h2>
An intermediary is an entity that facilitates the flow of data between two parties in a financial transaction. Within banking and financial services, a financial data intermediary, sometimes called an open banking intermediary, is a platform that mediates the data sharing between financial institutions and third parties. This open banking connection supports <a href="https://www.mx.com/blog/what-is-account-aggregation/">financial data aggregation</a> and streamlines access to innovative and modernized processes.
In other words, a financial data intermediary, or an open banking intermediary, enables financial institutions to connect to <a href="https://www.mx.com/blog/what-is-consumer-permissioned-data/">consumer-permissioned data</a>, make it actionable, and unlock the true value of data.
<a href="https://www.forrester.com/blogs/selecting-an-open-banking-intermediary-forresters-latest-wave/">According to Forrester</a>, open banking intermediaries provide the &ldquo;connective tissue between financial product providers, such as banks and insurance firms, and third parties looking to innovate on top of open banking access.&rdquo;
In the financial industry, data is paramount &mdash;&nbsp;making financial data intermediaries an important player in ensuring financial institutions can connect to data seamlessly and securely.&nbsp;
With better insights from consumer-permissioned data, financial providers can improve the customer experience, identify opportunities to grow deposits, and inform key decisionmaking.
<h2 id="examples">Other Types of Financial Intermediaries</h2>
Traditionally, a financial intermediary is a middle man facilitating financial transactions, sometimes referred to as a transactionary intermediary service. There are many types of financial intermediaries that can help in any process involving funds. Some of the most common financial intermediaries are:
<ul>
<li style="font-weight: 400;" aria-level="1">Banks: Every banking institution offers some type of transactionary intermediary service.</li>
<li style="font-weight: 400;" aria-level="1">Non-banks: Non-banks provide financial services without a formal banking license through transactions such as mutual funds.</li>
<li style="font-weight: 400;" aria-level="1">Investments: These intermediaries handle investment-related transactions through stock exchanges and brokerage firms.</li>
<li style="font-weight: 400;" aria-level="1">Financial Advisors: Similar to investments, financial advisors facilitate investment work and provide financial guidance for funds management.</li>
<li style="font-weight: 400;" aria-level="1">Payments: Payment intermediaries are the bridge that processes electronic and digital payments.</li>
<li style="font-weight: 400;" aria-level="1">Insurance: Insurance businesses facilitate work that lessens risk after receiving funds from their customers.</li>
</ul>
<h2 id="difference">What Is the Difference Between a Financial Data Intermediary and Data Aggregator?</h2>
Financial data intermediaries and financial data aggregators are similar, but not completely synonymous.&nbsp;
<a href="https://www.mx.com/blog/what-is-account-aggregation/">Financial data aggregation</a> is the process of bringing together information from different financial accounts into a single place. Like a financial data intermediary, data aggregators enable consumers to connect and share their financial data with third parties. But the key difference lies in what happens to the data after it is aggregated.
Financial data intermediaries do not use any consumer information once it&rsquo;s been aggregated. On the other hand, data aggregators sometimes will use consumer data for their own purposes &mdash; like selling that data for profit.
For example, <a href="https://www.finra.org/investors/insights/be-mindful-data-aggregation-risks">FINRA warns</a> that some data aggregators &ldquo;could be storing all consumer financial information or security credentials in one place, creating a new and heightened security risk.&rdquo; In addition, some data aggregators may use or sell consumer financial data in ways that go beyond consumer consent.&nbsp;
At MX, we believe consumer financial data should only be used to ultimately benefit the consumer &mdash; and not used in ways that are purely value extraction or advantageous to an organization to the detriment of the consumer. These broader use cases that some data aggregators may choose to employ could go beyond that.
<h2 id="benefits">Benefits of Financial Data Intermediaries</h2>
Financial data intermediaries and the functionality they offer are possible because of today&rsquo;s advances in technology. Financial institutions that partner with financial data intermediaries to streamline their data sharing processes can experience a variety of benefits:
<h3>Benefits for Financial Institutions</h3>
Gain a Competitive Advantage
According to <a href="https://www.mx.com/research/consumer-research-digital-and-mobile-banking/">MX research</a>, 72% of consumers would likely seek out a different bank or credit union if their current provider couldn&rsquo;t connect their financial accounts to financial apps or other online accounts. By offering connectivity through a financial data intermediary, financial institutions can keep their consumers from looking elsewhere for intermediary services and gain an edge over their competitors.
Break Down Data Silos
Financial data intermediaries can make Open Banking possible. And Open Banking provides countless benefits to financial institutions. <a href="https://www.mx.com/blog/what-is-open-banking">Open Banking</a> provides financial services companies greater insights into their customers' needs and enables more efficient data sharing across the entire organization. It also helps create a unified approach to digital identity management and reduces data resale and data exhaust issues. This can lead to:&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">More Accurate Customer Profiles: Financial providers can gain access to real-time financial data from their consumers. They can easily see where consumers are sharing their data and why it is being used. This helps identify product and partnership opportunities.</li>
<li style="font-weight: 400;" aria-level="1">Enhanced Customer Experiences: By putting consumers in the driver&rsquo;s seat, financial providers can build trust and improve relationships, leading to greater customer satisfaction and loyalty.</li>
<li style="font-weight: 400;" aria-level="1">Personalized Services: By analyzing their financial data, businesses can identify specific customer needs or preferences and tailor their offerings accordingly. For example, a bank may offer investment opportunities to customers who have a higher disposable income, or provide budgeting tools to those who struggle to manage their finances. By offering more personalized services, businesses can create a stronger connection with their customers, leading to increased loyalty and retention.</li>
</ul>
Increased Reliability
Financial data intermediaries are constantly upgrading their servers with direct connections via a <a href="https://www.mx.com/guides/bank-apis/">bank API</a>, ensuring that financial providers can enjoy uninterrupted service.
Reduced Fraud and Risk
<a href="https://www.mx.com/blog/what-is-open-finance">Open Finance</a> enhances security measures, such as instant account verification and modern authentication standards, to protect consumer data and reduce the risk of fraud.&nbsp;
<h3>Benefits for Consumers</h3>
Enhanced Access to Financial Services
Open Finance allows consumers to connect their financial data with various apps and services, making it easier for underserved populations to access banking, credit, and investment opportunities.
Easier Money Management
Intermediaries empower consumers to link together data from a range of sources without having to sign into individual accounts every time they want to see their account and transaction information &mdash; with data being updated in real time.
Better Control Over Their Data
Consumers have more choice and control over the data they share and how they engage with their finances using open banking connections.&nbsp;
<h2 id="find">What to Look for in a Financial Data Intermediary</h2>
When financial providers are ready to reap the benefits of improved data access for themselves and their consumers, they will need to evaluate and weigh their options in choosing the right financial data intermediary.&nbsp;
There are various financial data intermediaries that financial institutions can work with, but these are the most important things to consider:
<h3>Interoperability</h3>
Within Open Banking, <a href="https://www.mx.com/blog/why-interoperability-matters/">interoperability</a> ensures that data flows easily and securely between data providers and third parties. This means consumers can share their financial information with authorized parties, such as budgeting apps or payment processors, without compromising privacy or security, and without being locked out depending on which financial provider they choose to use.
Financial institutions should ensure they work with an intermediary that promotes and prioritizes interoperability.&nbsp;
<h3>Consumer-Centric Principles</h3>
As mentioned above, some data aggregators may collect, store, use, or sell consumer financial data in other ways. Ensure that data intermediaries are not aiming to profit or use consumer-permissioned data beyond the scope of how the consumer has given permission.
<h3>Robust Data Security and Privacy</h3>
Make sure the intermediary has robust data security and privacy measures, including encryption, authentication protocols, and compliance with global data privacy regulations, like GDPR and CCPA.&nbsp;
Protecting sensitive customer data is paramount in the financial services industry to safeguard customer information and maintain trust in the digital financial ecosystem.
<h2 id="MX-intermediary">MX as a Financial Data Intermediary</h2>
MX is a <a href="https://www.mx.com/blog/what-cfpb-turbulence-means-for-open-banking/">huge proponent of Open Banking</a> and the benefits it delivers for consumers and the financial services industry. We truly believe that Open Banking creates a <a href="https://www.mx.com/blog/competition-open-banking/">competitive advantage</a> for financial institutions, an engine of innovation and growth for fintechs, and helps enable financial strength for consumers.
Open Banking (and Open Finance) helps put the right financial solutions in the hands of the right consumers at the right time. This happens while also fueling higher deposits and income for financial providers so they can pour more energy into innovation that moves the industry forward.&nbsp;
As an open banking intermediary, MX <a href="https://www.mx.com/blog/prioritizing-consumer-outcomes/">prioritizes consumer outcomes at every turn</a>. How do we do this?&nbsp;
<ul>
<li style="font-weight: 400;" aria-level="1">By focusing on open banking and secure APIs, MX is helping to create a more competitive and innovative financial services landscape that benefits consumers and businesses alike.</li>
<li style="font-weight: 400;" aria-level="1">When individuals and communities have access to &mdash; and can effectively use &mdash; a range of financial services, it fosters economic empowerment, reduces inequality, and promotes social mobility.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Financial fraud is a huge problem. MX helps bolster fraud prevention and mitigate risk with tokenized connections that eliminate credential sharing, real-time verifications and balance checks, and cleansed and enhanced transaction data that can help you spot anomalies faster.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Consumers should have the right to control their financial data and choose how it is shared and used. And, we believe consumers should provide clear and explicit permission for use of their data, including how it will be used to perform the requested service. </li>
</ul>

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Featured

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MX Founder Ryan Caldwell Returns as Chief Executive Officer

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Find us on

Are You Evolving with Generations of Consumers?

What Is Financial Wellness and Why It’s Not Just Important for Consumers

Opportunity over Obligation: Considerations for Standing Up an Open Banking API

Why Community Banks Matter — and the Need for the Right Policy Approach

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