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

The speed of adoption and the benefits of Open Banking hinge heavily on one key concept: interoperability. 

For Open Banking to reach its full potential, the financial ecosystem must prioritize interoperability in designs, collaborations, and future innovations.

Why Interoperability Matters in Open Banking and Key Strategies

By Maisie Bilotti, Sr. Director, Advocacy, MX
It&rsquo;s no secret that MX is a huge proponent of Open Banking and the benefits it delivers for consumers and the financial services industry as adoption accelerates. The financial service industry&rsquo;s move towards more privacy-first, efficient, and reliable connections through open banking APIs is an undeniable win for consumers, financial institutions, and fintechs.&nbsp;
When the financial data sharing ecosystem kicked off roughly 20 years ago, financial institutions and fintechs relied almost entirely on the practice of <a href="https://www.mx.com/guides/banking-apis-oauth-sceenscraping/">screen scraping</a> to pull data from other financial providers into their own systems. This practice, while useful at the time, is far less secure, less reliable, and less standardized than <a href="https://www.mx.com/guides/bank-apis/">open banking APIs</a>.&nbsp;
Screen scraping also places a much heavier burden on developers and organizations to manage the technical complexity and cost of maintaining tens of thousands of data endpoints. By contrast, APIs streamline the process significantly by standardizing data sharing with one portal that manages data providers&rsquo; systems. Helpfully, standard-setting organizations like the <a href="https://www.mx.com/blog/why-fdx-matters/">Financial Data Exchange</a> (FDX) drive consistency and efficiencies across the ecosystem by establishing clear technical standards that keep data flowing effectively and securely for consumers and businesses.&nbsp;
The speed of adoption and the level of benefits that financial data ecosystem participants can reap from <a href="https://www.mx.com/blog/what-is-open-banking/">Open Banking</a> hinge heavily on one key concept: interoperability. This is a fundamental principle that drives the potential of Open Finance, enabling greater access, efficiency, and innovation within the financial ecosystem.&nbsp;
At MX, we believe building for interoperability and openly engaging with the broader ecosystem is the right thing to do to stay competitive and provide consumers with the best experience. It also meaningfully levels the playing field by making it easier for companies of all sizes to fully participate in the financial data ecosystem.&nbsp;
In this post, we&rsquo;ll tackle key questions including:&nbsp;
<ul>
<li><a href="#what">What is Interoperability in Open Banking?</a></li>
<li><a href="#why">Why is Interoperability Important in Open Banking?</a></li>
<li><a href="#competition">How does Interoperability Promote Competition and Innovation?</a></li>
<li><a href="#build">How Can Financial Institutions and Fintechs Build for Interoperability?</a></li>
<li><a href="#future">What Does the Future Hold for Interoperability in Open Finance?</a></li>
</ul>
<h2 id="what">What is Interoperability in Open Banking?</h2>
Within Open Banking, Interoperability ensures that data flows easily and securely between data providers &ndash; often banks and credit unions &ndash; and third-party data recipients (i.e., fintechs and other providers of financial products and services). In practice, this means building products and collaborating with the ecosystem in a way that leads to seamless consumer experiences when connecting accounts from one bank or fintech to another, even if the other entity is your competitor.&nbsp;
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. By promoting a standardized approach to data sharing, interoperability removes the barriers that traditionally exist between different financial entities, fostering innovation and enhancing the customer experience.
This becomes incredibly important at high-impact moments in consumers&rsquo; lives. For example, quick, accurate, and secure identity and account verification is crucial when a consumer is getting their first mortgage. Similarly, the ability to easily send funds to a foreign bank account is essential for a bank customer whose child is studying abroad. Interoperability makes these processes much easier for both the consumers engaging in these transactions and the banks and fintechs that initiate them.&nbsp;
On the flip side, connection roadblocks can drive consumers crazy. An MX colleague recently tried moving money from a crypto exchange to her bank, only to find the connection wasn't available. She had to jump through hoops &mdash; getting account and routing numbers, using an intermediary platform &mdash; just to complete the transfer. This terrible experience will push customers to switch banks.&nbsp;
For Open Banking to reach its full potential, interoperability is essential. It enables consumers to access a broader range of services, facilitates competition among providers and recipients, and, ultimately, leads to better, more tailored financial products.&nbsp;
<blockquote>
Without interoperability, the promise of Open Banking &mdash; creating a more inclusive, transparent, and efficient financial ecosystem &mdash; would be limited.
</blockquote>
<h2 id="why">Why is Interoperability Important in Open Banking?</h2>
Before Open Banking became a formal concept, the financial services industry was traditionally closed. Banks and financial institutions controlled access to customer data, limiting how third parties could gain valuable insights to innovate and offer more compelling consumer products. Over time, however, the growth of digital banking, fintech start-ups, and mobile payment solutions led to a need for greater openness in financial services.&nbsp;
On the regulatory front, interoperability and data portability mandates have become increasingly prevalent in the healthcare and consumer technology industries around the world, and the financial services industry is no exception.
And, it&rsquo;s with good reason. Interoperability and data portability put the consumer in control of their data destiny, and remove market power from would-be gatekeepers. Pressure from consumers and governments have incentivized data holders, processors, and recipients to retain customers by providing optimal services &mdash;&nbsp;instead of trapping consumers and their data for their own gain.&nbsp;
<h2 id="competition">How does Interoperability Promote Competition and Innovation?</h2>
Interoperability delivers competitive benefits and new opportunities for innovation to both large and smaller players in the financial ecosystem.&nbsp;
It can make it easier for small- and medium-sized financial institutions to offer the same level of secure, high-performing consumer experiences as large financial institutions by connecting seamlessly to add-on services and insights that larger institutions are capable of providing in-house.&nbsp;
For larger financial institutions, interoperability allows them to position themselves as leaders in data sharing and Open Banking initiatives. This can grow their business by attracting tech-savvy consumers who value transparency and ease of access. Embracing interoperability can also establish them as trusted providers with consumers, increasing trust and customer loyalty.
For fintechs, interoperable platforms and connections can increase market reach, lead to faster integrations and reduced time to market for product launches, generate partnership opportunities, improve scalability, and lead to cost savings.&nbsp;
While competition and innovation are beneficial to businesses and the overall economy, they should always prioritize the consumer. Financial data is extremely sensitive. We must ensure that it is used responsibly and ethically to benefit both consumers and businesses. If consumer data is exploited, trust in Open Banking will erode, and people may reject data sharing and its benefits.
<h2 id="build">How Can Financial Institutions and Fintechs Build for Interoperability?&nbsp;</h2>
To achieve interoperability across the financial sector, several key strategies should be adopted:&nbsp;
<ol>
<li style="font-weight: 400;" aria-level="1">Adopt open standards, such as FDX and OAuth standards, for Open Banking, to ensure compatibility and consistency across various platforms. Embracing these standards streamlines the exchange of data and communication, enabling seamless integration and interoperability between different financial institutions and third-party providers.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Build APIs with a clear focus on documentation, versioning, and scalability. Well-documented APIs with clear versioning guidelines make it easier for developers to understand and integrate with existing systems. Additionally, ensuring that APIs are scalable allows them to handle growing traffic and evolving data requirements, supporting future growth and innovation within the financial services industry.</li>
<li style="font-weight: 400;" aria-level="1">Collaborate and actively participate within the ecosystem to ensure alignment on standards and smooth interactions between different systems. By working together and sharing knowledge, fintechs, financial institutions, regulators, and other stakeholders can create a more cohesive and interconnected financial landscape. This collaborative approach fosters trust and transparency, while also driving innovation and improving the overall customer experience.</li>
<li style="font-weight: 400;" aria-level="1">Implement robust data security and privacy measures, including encryption, authentication protocols, and compliance with global data privacy regulations like GDPR and CCPA. <a href="https://www.mx.com/whitepapers/security-how-mx-protects-your-data/">Protecting sensitive customer data</a> is paramount in the financial services industry to safeguard customer information and maintain trust in the digital financial ecosystem.</li>
<li style="font-weight: 400;" aria-level="1">Prioritize continuous testing and monitoring to maintain integrations as new services and systems emerge. The financial services landscape is constantly evolving, with new technologies and services emerging regularly. Continuous testing and monitoring ensure that systems remain compatible and integrated &mdash; preventing disruptions and ensuring a seamless experience for customers as the industry evolves.</li>
</ol>
<h2 id="future">What Does the Future Hold for Interoperability in Open Finance?</h2>
Advancements in technology, such as <a href="https://www.mx.com/guides/risks-rewards-ai/">artificial intelligence</a> (AI), blockchain, and quantum computing, will likely play a significant role in enhancing interoperability in the open finance space. These emerging technologies have the potential to further streamline processes, improve data sharing, and facilitate smoother interactions between financial institutions.&nbsp;
Alongside these, the evolving regulatory landscape will also shape the future of <a href="https://www.mx.com/blog/what-is-open-finance/">Open Finance</a>. Regulators across the globe are pushing for interoperability standards that support cross-border collaboration and ensure a unified framework for financial services. Moreover, Open Finance has become a key driver of financial inclusion, with global economic development organizations and nonprofits such as CGAP, BIS, IMF, UNSGSA, and the World Bank collaborating to create guidelines that help countries build open banking frameworks that promote economic inclusion.&nbsp;
Finally, evolving consumer expectations are accelerating the shift toward interoperable financial services. As consumers become more tech-savvy, they increasingly <a href="https://www.mx.com/research/the-missing-link/">demand seamless, integrated experiences</a>, pushing the financial industry to adopt more collaborative models that meet these expectations and foster greater efficiency in service delivery.
<h2>Conclusion</h2>
Interoperability is a cornerstone of Open Finance. Without it, consumers would face fragmented systems that limit their access to a full range of financial tools and opportunities to meet their financial goals.&nbsp;
For Open Finance to truly flourish, stakeholders must prioritize interoperability in their designs, collaborations, and future innovations. Open Finance has tremendous potential to transform the global financial landscape. With interoperable systems, we can unlock new opportunities for individuals, businesses, and entire economies &mdash; driving better outcomes for businesses, better tools for consumers, and greater financial inclusion.&nbsp;

Why Interoperability Matters in Open Banking

Check out MX's highlights from 2025 — Insights generated, OAuth Connections added, and more Data Access Connections than ever.

MX highlights key 2024 metrics related to financial insights, Open Banking, Data Access, and OAuth.


MX Highlights from 2024

Here&rsquo;s to 2025 &mdash; another year of opportunities, innovation, and the chance to build great things together! We&rsquo;re grateful to our clients and the journey we&rsquo;re on together to empower the world to be financially strong.&nbsp;
As we look back on the previous year, we&rsquo;re sharing a few highlights of the work we&rsquo;ve done to drive better connectivity, outcomes, and results for you and consumers. Here&rsquo;s our three cheers for the New Year:
<h2>1. 2 Billion Insights Generated</h2>
More than half of U.S. consumers (54%) want financial providers to leverage their financial data to personalize their experience, <a href="https://www.mx.com/whitepapers/key-takeaways-forrester-opportunity-snapshot/">according to MX research</a>. In 2024, MX generated 2 billion data-driven, personalized <a href="https://www.mx.com/products/financial-insights/">financial insights</a> to help consumers better understand and manage their finances. Through the power of data, MX is empowering financial institutions to deliver actionable, relevant insights to their customers that aid them on their financial wellness journey.
<h2>2. 26% Increase in OAuth Connections </h2>
<a href="https://www.mx.com/research/consumer-research-digital-and-mobile-banking/" target="_blank" rel="noopener">MX research</a> found that 72% of consumers would switch financial providers if they were unable to connect to their preferred financial app. The best way to deliver a seamless, reliable, and secure connectivity experience for consumers is through <a href="https://www.mx.com/guides/banking-apis-oauth-sceenscraping/" target="_blank" rel="noopener">open finance, or OAuth, API connections</a>. And, we&rsquo;re constantly investing in adding new connections to ensure MX is a top leader in Open Finance for our clients and consumers. In 2024, we increased our OAuth connections by 26% and launched multiple APIs.
<h2>3. 300,000 Data Access Connections Achieved</h2>
In 2024, MX has expanded to over 300,000 consumer-permissioned data sharing connections across 7 intermediaries through <a href="https://www.mx.com/products/data-access/">Data Access</a>. Our Data Access solution combines an API platform that meets FDX standards with built-in analytics. As Open Banking adoption speeds up in 2025 with new regulations on the horizon, such as <a href="https://www.mx.com/blog/1033-is-here-whats-next/">Section 1033 of the Dodd-Frank Act</a>, MX continues to champion Open Banking APIs &mdash;&nbsp;and Data Access &mdash;&nbsp;to help financial providers <a href="https://www.mx.com/blog/how-data-providers-can-compete-and-comply/">meet 1033 compliance obligations and gain actionable intelligence</a> at the same time.

3 Cheers for the New Year: Looking Back on a Year of Data-Driven Success

Winning with data in business comes down to basic strategy, trusting the data, and sometimes, taking an unconventional approach. 

Jeff Ma shares data-driven lessons from blackjack that can transfer to important decision-making business strategies.

Using Data for Key Business Decisions

Earlier this year, MX commissioned a study of 150 data strategy leaders in North American financial institutions with Forrester Consulting that found 80% agree <a href="https://www.mx.com/blog/how-financial-data-intelligence-improves-outcomes/">being able to effectively utilize consumer financial data</a> would be a significant competitive advantage. Yet, many still struggle to win with data across their organizations. Why? It comes down to basic strategy, trusting the data, and sometimes, taking an unconventional approach.&nbsp;
Jeff Ma, the inspiration behind the movie, 21, recently shared his lessons learned about how to win with data from his experience at the casinos in Las Vegas.
Here are the key takeaways from his talk at the <a href="https://www.mx.com/summit/2024/win-with-data/">2024 Money Experience Summit</a>:
<h2>Stay Data-Driven for Consumer Benefit</h2>
Jeff previously worked as a vice president of data at X, and shared that decisions were made based on how data could be used for good. &ldquo;We didn&rsquo;t use the user data for bad. We had this rule &mdash; we would only use the data if it really enhanced the customer&rsquo;s experience&hellip; You can feel good about using customer data when you are building value for the customer.&rdquo;
The proper use of data can greatly benefit and empower consumers. When it comes to the use of <a href="https://www.mx.com/whitepapers/secondary-use-cases/">consumer-premissioned data</a> within the finance industry, the data collected should only be used to help consumers gain insights into their own finances and make better financial decisions. Are you ensuring that your consumer data is benefitting your customers?
<h2>Don&rsquo;t Fall Prey to Omission Bias</h2>
We all have cognitive biases that impact our decision-making abilities. For example, Jeff talked about the omission bias, which means that we often opt for inaction because we falsely believe those harms will be less than the harm caused by action.
In business, inaction can have severe consequences. Jeff said, &ldquo;We're trying to win. We're not trying to avoid losing.&rdquo; By not taking action, we may not feel as responsible for our shortcomings and failures. But the reward of overcoming our omission bias can set us up for serious wins and the ability to fully embrace the potential gains.
<h2>Challenge the Norm</h2>
When playing blackjack, Jeff made an unconventional decision that those surrounding him disagreed with at the time. But, because he had the knowledge and data that informed his decision, he trusted the data. This paid off in the end.
<blockquote>
&ldquo;Any time you have advancements in technology and data, you have to do unconventional things. And every time you do something unconventional, it is going to piss some people off.&rdquo;&nbsp;
</blockquote>
Jeff explained how he was able to commit to his decision with the question, &ldquo;but if they had the technology, the data, the knowledge that I had, would they maybe agree with me?&rdquo; Just because a decision may not be the most popular, does not mean it&rsquo;s wrong. Success comes from not simply going with the flow.
Watch the full keynote session <a href="https://www.mx.com/summit/2024/win-with-data/">here</a>.

Betting on Data: Lessons From a Blackjack Master

The Canadian government released its Complete Consumer-Driven Banking Framework as part of its 2024 Fall Economic Statement.

Here’s our quick overview of key components of Canada’s Consumer-Driven Banking Act, shared in Dec. 2024 as part of the 2024 Fall Economic Statement. 

Breaking Down Canada’s Consumer-Driven Banking Act

On December 16, the Canadian government released its <a href="https://www.canada.ca/en/department-finance/news/2024/12/2024-fall-economic-statement-canadas-complete-framework-for-consumer-driven-banking.html">Complete Consumer-Driven Banking Framework</a> as part of its <a href="https://budget.canada.ca/update-miseajour/2024/report-rapport/toc-tdm-en.html">2024 Fall Economic Statement</a> for the year. The framework is built around three primary goals:&nbsp;
<ol>
<li style="font-weight: 400;" aria-level="1">To ensure financial safety and stability for Canadians</li>
<li style="font-weight: 400;" aria-level="1">To protect consumers while giving them access to tools to make informed financial decisions</li>
<li style="font-weight: 400;" aria-level="1">To promote competition and innovation in the financial services and fintech sectors.&nbsp;</li>
</ol>
We&rsquo;ve said it before and we&rsquo;ll say it again &ndash; we believe that <a href="https://www.mx.com/blog/consumer-financial-data-rights/">financial data should be accessible and actionable for all consumers</a> to better enable decisions, experiences, and outcomes. We also believe that it increases competition, creates a more level playing field, and increases digital innovation to help improve financial outcomes for consumers. We are pleased to see the Canadian government moving forward with a framework to drive forward the safe adoption of <a href="https://www.mx.com/blog/what-is-open-finance/">Open Finance</a> in Canada.
This framework comes just a few months after the U.S. published its final rule from the Consumer Financial Protection Bureau under <a href="https://www.mx.com/blog/cfpb-dodd-frank-section-1033/">Section 1033 of the Dodd-Frank Act</a> to establish consumer data rights. While there are clear similarities and we know both the U.S. and Canada are committed to creating interoperable data-sharing standards, there are also some core differences.&nbsp;
<h3>Core Framework Elements</h3>
Below is a quick overview of the complete framework and how it aims to benefit Canadian consumers:&nbsp;
<ol>
<li style="font-weight: 400;" aria-level="1">Governance: Oversight will be managed by the Financial Consumer Agency of Canada (FCAC). The framework will also include a new position, Senior Deputy Commissioner of Consumer-Driven Banking, responsible for overseeing compliance and consumer protection.</li>
<li style="font-weight: 400;" aria-level="1">Scope: Initially, major retail banks will be required to participate, with other financial institutions (like credit unions) able to opt in. The scope of covered data includes checking and savings accounts, investment products available through online portals, and lending products such as credit cards and mortgages. The prohibition against screen scraping is intended to go into effect after the framework is fully operational, with a target date of early 2026.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Accreditation: Canada&rsquo;s framework includes a formal accreditation framework, inclusive of process, oversight, and criteria for entities wishing to collect consumer-permissioned data from data holders. Only accredited entities will be able to access consumer data. This ensures only trusted providers can participate in data-sharing, with the FCAC overseeing the accreditation process.</li>
<li style="font-weight: 400;" aria-level="1">Common Rules: These rules will cover privacy, security, and liability, providing a consistent and clear framework for participants. Privacy will be especially protected, with consumers having control over which data is shared and for how long.</li>
<li style="font-weight: 400;" aria-level="1">Privacy: The framework includes additional privacy rules that are unique to financial data sharing focused on consent management. Participants will be required to reconfirm consent at specified intervals (every 12 months) or following certain events.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Liability: Liability under this framework is based on the principle that liability moves with the data and rests with the party at-fault if anything goes wrong.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">Security: Strong security measures will be in place to protect consumer data, with all participants required to meet a high standard for data protection. Ongoing audits will ensure compliance.</li>
<li style="font-weight: 400;" aria-level="1">National Security: To safeguard the integrity of the financial system, the government will have powers to intervene in cases where national security or financial system stability is at risk.</li>
<li style="font-weight: 400;" aria-level="1">A Single Technical Standard: The framework mandates the use of secure, standardized APIs, ensuring interoperability and alignment with global best practices. The government will mandate the use of a single technical standard.</li>
</ol>
<h3>Next Steps</h3>
The Consumer-Driven Banking Act was passed in June 2024, and additional legislation is slated to be proposed in the coming months to solidify key components such as accreditation and national security measures. The goal is to have the framework fully operational by early 2026. The FCAC will oversee the implementation and compliance of the framework, ensuring participants follow privacy, security, and liability standards. A new advisory committee will be established to ensure uniform guidelines and penalties.

Canada’s Open Banking Framework Takes Shape

Check out industry experts takes on what the U.S banking system should look like and how their thoughts can drive outcomes in 2025 and beyond. 

Looking Forward: What Should the U.S. Banking System Look Like? 

The United States has one of, if not the, most complex banking system in the world. From the <a href="https://www.mx.com/blog/biggest-banks-by-asset-size-united-states/">large number of institutions</a> serving a huge diversity in populations to the simple size and disbursement of the country, a one-size-fits-all approach simply does not work. But is this a good thing, a bad thing, or something in the middle? At the 2024 <a href="http://mx.com/summit/2024">Money Experience Summit</a>, industry experts came together to discuss the banking system and asked the question &mdash; &ldquo;What should the U.S. banking system look like?&rdquo;
Covering the pluses and minuses of the banking system today&mdash; and what they would change if they had a magic wand, here are some key takeaways from this panel of experts:
<h2>The Role of Fintechs: Disruption and Augmentation</h2>
Being competitive as a fintech means finding ways to either augment or disrupt the banking system. TTV Capital&rsquo;s Lizzie Hartley gave her take on where she looks for that competitive edge. &ldquo;We have invested in both fintechs that disrupt and support the current system. More than anything we look to invest in companies that solve problems that exist today.&rdquo;
Financial services have, in large part, operated on a &ldquo;if it ain&rsquo;t broke, don&rsquo;t fix it&rdquo; model. However, this can lead to stagnant innovation and groups of underserved consumers. Financial providers and fintechs should focus on seeing and solving problems to reinvigorate the competition needed to drive innovation forward and deliver better outcomes for consumers.&nbsp;
<h2>Filling the Gaps with Niche Products</h2>
While the banking system in the United States is large and complex, it is not comprehensive. The system we have now hits the broad strokes, but it has holes around certain groups and services. These holes have been where fintechs have historically found purchase in a banking system not inclined to change.&nbsp;
Alex Johnson, founder of Fintech Takes, notes that given the complex nature of the U.S. banking system, there will always be people who have more niche needs to be solved by their financial providers.
The problem, as Alex puts it, is when products that solve for these niche needs are proposed, banks and venture capitalists are reluctant to invest. Niche products have traditionally been hard to make work at scale, making investors wary of standalone niche products. However, these products can be successful in a co-opetition model. By designing products that can be used by several smaller or regional financial institutions that serve similar niche populations, issues of scale can be solved for and financial products that people need can be more easily introduced to the market.&nbsp;
While offering niche products is not always feasible at scale, both Alex and Lizzie expressed the importance of keeping underserved populations in mind when looking to the future of the U.S. banking system.
<h2>The Role of Branches in an Age of Digitalization</h2>
Artificial Intelligence (AI) and machine learning have been quietly operating in the background for years. But, they have yet to replace human interactions. Why? In part, this is because banking requires a level of trust, and consumers are still not fully ready to trust AI. MX research shows that <a href="https://www.mx.com/research/the-missing-link/">43% of consumers</a> say they do not trust the use of AI to help them track and manage their finances.&nbsp;
Financial providers should consider how technology and humans can work hand-in-hand to deliver the best experiences for consumers. Jeff Otero, Vice President of Experience Design of Ent Credit Union, suggested that physical branches can be a strength in reaching customers.&nbsp;
&ldquo;Something that is really cool about our opportunity, wherever we are, is having boots on the ground,&rdquo; said Jeff. To him, it&rsquo;s more than just a physical presence, but rather a community presence. Living and working in the community and building up a branch manager who is a part of the community creates a unique opportunity to support the specific needs of customers.&nbsp;
<h2>Looking Ahead to 2025</h2>
The discussion ended with everyone&rsquo;s wave of the magic wand:&nbsp;if you could immediately change something, what would it be? While every panelist had different perspectives, every road led to the same place &mdash; the consumer.&nbsp;
From better leveraging data to simplifying experiences for consumers to Open Banking, there are a myriad of trends on the horizon that can help meet consumer needs. As the new year approaches, join us in looking ahead to the top trends that can drive growth and engagement in 2025. <a href="https://www.mx.com/webinars/top-trends-grow-desposits-engagement-2025/">Register today for our webinar</a> on January 23 at 9 a.m. PT for a look into MX&rsquo;s predictions for the financial industry.

The Ghost of Banking Future: What Lies Ahead for the U.S.? 

Technology continues to evolve and open up a world of opportunities and new challenges of digital transformation?

Author of Bankers like Us weighs in on how institutions can overcome tech and process challenges in financial services.

Beating Inefficiencies in Financial Services

For decades, the conversation in financial services has been digital transformation. And, a quick internet search shows a myriad of statistics and case studies about why digital transformations fail. But, according to Dr. Leda Glyptis, the author of <a href="https://www.amazon.com/Bankers-Like-Us-Dispatches-Transition-ebook/dp/B0BSTJNKZT">Bankers Like Us</a>, we&rsquo;ve actually been pretty good at adopting new technologies. However, it&rsquo;s still really hard.&nbsp;
Technology will continue to evolve and open up a world of opportunities &mdash; digital transformation isn&rsquo;t something that has an end date. So how do we address the challenges of digital transformation? At <a href="https://www.mx.com/summit/2024/know-your-customers/">Money Experience Summit 2024</a>, Dr. Glyptis explained how institutions can overcome the holdups and challenges that are plaguing the industry.
Here are the key takeaways:
<h2>Regulations Don&rsquo;t Have to Be a Hinderance</h2>
Over the past year, there has been little conversation about the financial industry and Open Banking without mentioning the latest regulatory rulemaking &mdash; <a href="https://www.mx.com/blog/cfpb-dodd-frank-section-1033/">Section 1033 of the Dodd-Frank Act</a>. And since its <a href="https://www.mx.com/blog/1033-is-here-whats-next/">final publication</a> in October, there have been even more conversations surrounding regulation and what&rsquo;s next.
Feeling stuck when introduced to new regulations and requirements is a common sentiment as it puts pressure on organizations to change their processes. But, regulation actually opens up additional opportunities for organizations to self-reflect and determine what can be made better to the benefit of consumers. As Dr. Glyptis said, &ldquo;the reality is, in every organization I have worked, regulatory change is actually how we got headspace and budget to innovate.&rdquo;
Although they may feel limiting at times, regulations require change and change can open up additional opportunities for innovation. Through a shift in mindset, regulations can level the playing field and allow financial institutions to implement strategic initiatives that will better serve the customers.&nbsp;
<h2>AI Needs to Start with Good Processes</h2>
Artificial Intelligence (AI) has been the hot topic of digital transformation over the recent years. Industry leaders are caught brainstorming how they can better use AI so they don&rsquo;t fall behind their competition. And while AI can help improve certain inefficiencies, it is not the fix-all solution that it is made out to be. And it certainly isn&rsquo;t the first step.
&ldquo;I care about the hierarchical policy and procedural organizational hangups that will forever make the job an uphill struggle no matter how intelligent you get about AI,&rdquo; said Dr. Glyptis. Efficiency starts with process and recognizing the slowdowns.
Businesses must start out by auditing their current policies and procedures to determine what bottlenecks they face. There is more power in establishing strategic policies and procedures that can streamline everyday tasks, compared to simply introducing another piece of AI technology for the sake of it.
<h2>Rooting Out Inefficiencies</h2>
Dr. Glyptis pointed out that when we find ourselves stuck, we should first look inward to find a fix. Too often we get comfortable with the way we do things and fail to realize certain policies we&rsquo;ve put in place are preventing us from being efficient and innovative.
Although we may recognize a need, completely revamping policies and procedures can be a serious undertaking that we put off until we realize we are behind the times. Dr. Glyptis said, &ldquo;you actually sort of sidestep a lot of problems because you're not gonna fix everything today.&rdquo; So we often don&rsquo;t attempt to fix them today, tomorrow, or next week. And then we find ourselves even deeper into inefficient processes.
<blockquote>
&ldquo;I remember talking to one of my CEOs a few years back, &lsquo;do I need to learn this [new technology]?&rsquo; The answer was, &lsquo;well you don't, but the organization does. Because by the time you retire, we&rsquo;ll be late.&rsquo;&rdquo; &mdash; Dr. Leda Glyptis
</blockquote>
Dr. Glyptis ended with a word of advice on how to fully become unstuck in this age of digital transformation. Financial institutions have the building blocks for success: data, resilience, and governance. Everyone should accept that they have this reach &mdash; the ability to make change &mdash; no matter where they sit in their organization.
<a href="https://www.mx.com/summit/2024/know-your-customers/">Watch the full session here</a>.

Overcoming the Challenges of Digital Transformation

Industry experts at MXS discuss how putting the customer first drives greater engagement and loyalty.

Growing Engagement and Loyalty Through a Customer-Centric Mindset

&lsquo;Tis the season for increased consumer spending. In fact, the <a href="https://nrf.com/media-center/press-releases/steady-sales-growth-expected-2024-holiday-season-according-nrf">National Retail Federation forecasts winter holiday spending</a> to grow between 2.5% and 3.5% over last year &mdash;&nbsp;equating to more than $979 billion in total holiday spending in November and December. And, increased spending means increased opportunity to engage with consumers to help them manage and track their finances.&nbsp;
Consumers have more choice than ever in where to turn for financial services and our research shows that <a href="https://www.mx.com/research/how-to-keep-consumers-from-breaking-up-with-banks/">59% of U.S. consumers</a> want their financial provider to proactively help them better manage their finances. And, a <a href="https://www.mx.com/research/the-missing-link/">bad experience could make them turn elsewhere</a>.&nbsp;
At our recent <a href="http://mx.com/summit/2024">2024 Money Experience Summit</a>, industry experts discussed how to grow engagement and loyalty among consumers with very diverse preferences, demographics, and behaviors isn&rsquo;t always easy. The key? Embodying a customer-centric mindset.&nbsp;
Here are a few key takeaways from the session:&nbsp;
<h2>Recognize that Consumers Don&rsquo;t Want to Bank&nbsp;</h2>
Life is filled with demands on our time and attention. Consumers don&rsquo;t want to spend what little extra time they have on managing their finances. Digital Product Leader Lea Sims said, &ldquo;People do not want to bank. They want to buy, they want to be with their families, they want to have things they want to take care of their families and their children. They don&rsquo;t want to bank.&rdquo;&nbsp;
If financial providers can make products and services as easy to access and operate as possible, customers are more likely to engage and stick around. And, it starts with a <a href="https://www.mx.com/guides/building-long-term-digital-engagement/">strong onboarding experience</a> that creates a foundation for engagement to help them get the most out of their financial provider.&nbsp;
According to Justin Olson, president and CEO of Utah Community Credit Union, &ldquo;Onboarding needs to be easy. It just needs to be so easy. Simplicity is really key.&rdquo;&nbsp;
<h2>See Consumers as Individuals, Not Averages&nbsp;</h2>
Every consumer has their own individual journey. <a href="https://www.mx.com/research/how-to-keep-consumers-from-breaking-up-with-banks/">More than half of U.S. consumers (54%) expect their financial provider to know them</a> and they want financial providers to leverage the data providers have about them to personalize their experience. There is no one-size-fits-all approach to managing finances.&nbsp;
Danielle Wright, managing director of Utah and Idaho and J.P. Morgan Private Bank,&nbsp; advocates for organizations to try to reflect this mindset of knowing your customer through the &ldquo;services we provide, the products we offer, and the ways we interact with our clients.&rdquo;
Financial providers have more data than ever about their customers at their fingertips. However, many are still not maximizing the value of that data by putting it into action.&nbsp;
<h2>Put Data to Work</h2>
Data is the key to understanding consumers and developing personalized experiences. &ldquo;We have a lot of [data], but we need to not be tone deaf. When we reach out to a consumer and if we are not speaking to them in a way that is not personalized, they are going to disengage because it just becomes white noise,&rdquo; says Olson.&nbsp;
Loyalty is earned when customers feel seen and understood, so using data to reach customers needs to be done in a way that reflects that.&nbsp;
Catch the <a href="https://www.mx.com/summit/2024/engagement-and-loyalty/">full replay of this conversation</a> for more insights on MXS Rewin

Customer-Centric, Personalized, Data-Driven: A Recipe for Engagement and Loyalty

Take a special look into consumer attitudes regarding economic fears, election feelings, tech preferences, and trust.

Explore consumer data from Rebel on economic fears, election feelings, tech preferences, and trust to help financial providers better understand consumers.

A Peek into Consumer Attitudes about the Economy, Trust, and Mobile Apps

A deeper understanding of consumer attitudes and behaviors can be the missing piece that financial institutions and fintechs need to gain a competitive advantage.&nbsp;
At the <a href="https://www.mx.com/summit/2024/consumer-behavior-insights/">2024 Money Experience Summit</a>, we got a special look into the&nbsp; latest findings from Rebel, a consumer research firm, <a href="https://www.rebel-co.com/finance-feelings-and-fears">on economic fears, election feelings, tech preferences, and trust</a> to help financial providers better understand consumer attitudes towards brands and today&rsquo;s digital experiences. Here&rsquo;s a few key takeaways from Rebel&rsquo;s CEO Leah Hacker:&nbsp;
<h2>A Deep Dive into the Data</h2>
Over the course of 2024, Rebel has spent time speaking with folks about their perspectives &mdash; of brand trust, technology, the economy, personal money management, and even the election. Turns out, consumers have some big feelings.
<blockquote>
&ldquo;It costs $1,500 a month for two kids in daycare. We both work. The cost of groceries is ridiculous. I have no idea how we&rsquo;re supposed to save for a home, save for retirement, and take care of everyday life&mdash;let alone the surprises.&rdquo;
</blockquote>
From a tumultuous election year to a constant war with information, people are inundated with information on politics, brands, the economy, and popular culture across all channels. The result of an always-on information cycle has implications on how folks respond to and interact with technology and brands they trust:
<ul>
<li style="font-weight: 400;" aria-level="1">In a <a href="https://www.rebel-co.com/resources/industries-trust-grades-quick-look">study on consumer trust</a>, Rebel found that the finance industry was among the top 10 most trustworthy industries for men. However, this was not the case for women &mdash; the finance industry did not make the top 10 for female consumers.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">When it comes to brand trustworthiness, irrespective of industries, 71% of folks reported that <a href="https://www.rebel-co.com/resources/how-consumers-build-trust-quick-look">consistent product quality was the top influence in determining trustworthiness</a>.</li>
<li style="font-weight: 400;" aria-level="1">When we look deeper and across age segments, we find that <a href="https://www.rebel-co.com/resources/how-consumers-build-trust-quick-look">Gen Z is the most discerning consumer group</a> &mdash; with their top reason for not trusting a brand being split across four factors &mdash; a bad experience (28%), poor customer service (19%), poor brand reputation (19%), and inconsistent product quality (16%). For all other age cohorts, the top listed reason for not trusting a brand was simple: a bad experience.&nbsp;</li>
</ul>
The always-on culture has resulted in a constant connection to our technology. While most consumers we spoke with agree that technology has added value in terms of efficiencies, there is some market indication that folks are looking to disconnect. For example, <a href="https://pro.morningconsult.com/analysis/dumb-phone-gen-z-millennials-dumb-tech-interest-2024">42% of Gen Z adults and Millennials</a> express the desire to incorporate more devices lacking advanced digital capabilities, 55% of Gen Z have turned off notifications to assist with tech overwhelm, and 41% of Gen Z have either taken a break from social media or completely deleted an app for mental health.
<ul>
<li style="font-weight: 400;" aria-level="1">43% of Millennials and 30% of Gen X report they feel anxious without their phones</li>
<li style="font-weight: 400;" aria-level="1">75% of consumers report they prefer in-person interactions versus technology</li>
<li style="font-weight: 400;" aria-level="1">47% of consumers reported they are somewhat comfortable with AI being implemented in the financial industry</li>
<li style="font-weight: 400;" aria-level="1">The more nuanced, complex, or even riskier the interaction is, the more users are uncomfortable with AI&nbsp;</li>
</ul>
Going one step further, these results have a direct implication on how finance brands are thinking about marketing, go-to-market strategies, and product roadmaps. For marketers and product managers, there&rsquo;s some work to do to understand how consumers are integrating next generation technology into their lives. And, data is necessary to further understand what the consumers expect from their finance providers in the future.&nbsp;
<a href="https://www.mx.com/summit/2024/consumer-behavior-insights/">Check out this on-demand session</a> for even more perspectives from our <a href="https://www.mx.com/summit/2024/">MXS Rewind</a> videos.

Finances, Fears, and Feelings

Financial health and inclusion are challenging. Industry experts took the stage at MXS to talk about these important topics.

Industry experts share why financial health and inclusion matter and steps to take to drive the industry forward.


Financial Health and Inclusion Experts Speak to the Future at MXS

<blockquote>
&ldquo;It is really expensive to be poor. The most vulnerable households are spending 16% of their income on financial services.&rdquo; &mdash;Professor Emily Williams of Harvard Business School
</blockquote>
This shocking statistic shared at the <a href="http://mx.com/summit">2024 Money Experience Summit</a> illustrates the inequitable nature of the financial system in the United States &mdash; those with the greatest need often receive the least support.&nbsp;
Fintechs were initially founded to find gaps in the financial market and help serve people historically left out of the financial system. However, according to Jennifer Tescher, CEO and founder of the <a href="https://finhealthnetwork.org/">Financial Health Network</a>, &ldquo;fintech has lost its way.&rdquo; The economics of a business-to-consumer (B2C) fintech solution are hard to make work at the scale needed to survive. And, business-to-business (B2B) fintechs have had a harder time creating solutions that improve the financial health of those living in these financial gaps.
Williams and Tescher were joined by Ashley Bell, CEO of Redemption Holding Company, and Nik Milanović, founder of This Week<a href="https://www.thisweekinfintech.com/"> in Fintech</a> to discuss the current state and future of financial health and inclusion in the United States, and how financial institutions can implement strategies for consumers from different backgrounds.
Here are some key takeaways from the conversation.
<h2>Boom and Bust: Trends in Supporting Black-Owned Fintechs</h2>
The dynamic of historically underserved populations has always been particularly prevalent in African American communities, but Ashley Bell explained a more recent aspect of this issue.&nbsp;
He shared that in the midst of the most recent fintech boom, the nation was also living through a heightened time of civil unrest in the United States. According to Bell, this combination led to a rapid increase in funding for fintechs designed to support Black communities. However, most of these fintechs did not make it because they were based on solutions that did not solve the underlying financial struggles within the communities they were supposed to serve.&nbsp;
It&rsquo;s not that financial solutions for minority communities cannot make money, but that it is &ldquo;really hard to be a new start up and build the economies of scale to do that,&rdquo; said Tescher. Instead, fintechs should take a B2B approach that never loses sight of the end user. By benefiting from the economies of scale offered in a B2B business model, fintechs can empower financial institutions to deliver better B2C solutions in these underserved communities.&nbsp;
<h2>Representation Matters</h2>
Keeping the consumer at the center is a great first step, but will not solve for the more systemic nature at the heart of this issue: representation.
Those from the community are always going to be the best qualified to understand the financial issues within that community, shares Bell. Putting people who can both speak to and for the people of minority communities in a position of authority creates the best outcomes for the business and the communities it serves.&nbsp;
Bell explained that during the recent boom of fintechs made to serve African American communities, problems arose from poor representation. These fintech solutions were either made for problems perceived from the outside or were not marketed in a way that showcased why they are better than the solutions, or lack thereof, already in use. Having board members and executives that are a part of minority groups and communities can solve for both of these problems.&nbsp;
We have a huge variety of people and communities in the U.S., but every one has a need to be financially healthy. By having people who understand the needs of an underserved community in positions to affect change, we are able to improve the financial health of those people and communities historically left out.&nbsp;
<h2>Walk a Mile</h2>
Whether equitable representation is a goal or a reality for your business today, progress won&rsquo;t happen without employing an empathetic mindset. As Tescher put it:
<blockquote>
&ldquo;When you walk in someone else's shoes and you really understand from their perspective, you start to see things differently.&rdquo;&nbsp;
</blockquote>
Doing this right means looking at consumer financial data differently, looking beyond the averages. Data is often used to paint the world by averages, to take people and make them numbers on a graph. But Tescher says, &ldquo;Averages skew what is happening to certain people.&rdquo;&nbsp;
She urged an empathic mindset and to ask yourself &ldquo;What do I need to better understand about their (the consumers) lives so that I can &hellip; engage with them at the right time and intervene when I can make a difference in their ultimate financial outcome?&rdquo;
Achieving financial health and inclusion for all Americans will be the greatest feat of the 21st century. But like any difficult journey, it will come one step at a time. By keeping consumers at the center of our efforts, finding ways to expand representation within our fields, and having an empathic mindset, we can start taking those steps today.&nbsp;
To hear more from these industry leaders, check out the full session on <a href="https://www.mx.com/summit/2024/financial-health-and-inclusion/">Payments, Lending, Financial Health, and Inclusion</a> here.&nbsp;

Blog

Featured

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

MX Founder Ryan Caldwell Returns as Chief Executive Officer

How to Encourage Consumers to Use New Money Management Approaches

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

Topic

Why Interoperability Matters in Open Banking

3 Cheers for the New Year: Looking Back on a Year of Data-Driven Success

Betting on Data: Lessons From a Blackjack Master

Canada’s Open Banking Framework Takes Shape

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

The Ghost of Banking Future: What Lies Ahead for the U.S.?

Overcoming the Challenges of Digital Transformation

Customer-Centric, Personalized, Data-Driven: A Recipe for Engagement and Loyalty

Finances, Fears, and Feelings

Why Financial Health and Inclusion Matters: Lowering the Price of Being Poor

Blog

Featured

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

MX Founder Ryan Caldwell Returns as Chief Executive Officer

How to Encourage Consumers to Use New Money Management Approaches

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

Topic

Find us on

Why Interoperability Matters in Open Banking

3 Cheers for the New Year: Looking Back on a Year of Data-Driven Success

Betting on Data: Lessons From a Blackjack Master

Canada’s Open Banking Framework Takes Shape

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

The Ghost of Banking Future: What Lies Ahead for the U.S.?

Overcoming the Challenges of Digital Transformation

Customer-Centric, Personalized, Data-Driven: A Recipe for Engagement and Loyalty

Finances, Fears, and Feelings

Why Financial Health and Inclusion Matters: Lowering the Price of Being Poor