Fortunately, the TCH proposal is not the only option for financial institutions. Future banks, including several TCH members, have signed user-friendly agreements with aggregators that do not restrict customer data or charge unnecessary fees. TCH moves the ball on several provisions that are positive for customers. First, it prohibits the sale of customer data without consent and, second, requires the customer`s consent before the data is transmitted. Finally, the proposal ends the joint collection and use of customer banking data, including usernames and passwords, a goal that the fintech community wholefty shares. While the use of APIs for secure sharing of financial data between banks and fintech has greatly increased, negotiating data exchange agreements is not without challenges. Hunter is convinced that the Model Agreement will reduce cycles and sticking points when negotiating such agreements: “APIs have the potential to greatly benefit consumers, but the long process of reaching an agreement can become a bottleneck for the introduction of the API… Using the chord model as a benchmark to facilitate API agreements can optimize and accelerate the deployment of API technology. “Lexology is a very relevant and interesting resource for south African interior lawyers. Information flows are a good measure of a company`s expertise and provide an interesting insight into the latest legal developments. I highly recommend it to Mr.
Lexology. The model agreement is part of TCH`s Connected Banking initiative, which aims to facilitate customer innovation and control, as well as secure exchange of banking data. One of the priorities of the initiative is the development of a model based on direct links between banks and fintech, called application programming interfaces (APIs). The Clearing House is a founding member of the Financial Data Exchange and encourages the use of the FDX API for secure and transparent data sharing. “We appreciate TCH`s leadership role in the exercise of consumer agreement, but many elements of the agreement have put consumers on the back burner by limiting access to their data and limiting their choice of use,” Sima Gandhi, Plaid`s director of business development and strategy, said in an email. “Allowing banks to prevent people from using the apps they want risks harming consumers, innovation and competition.” “APIs have the potential to significantly use consumers, but the long process of reaching an agreement can become a bottleneck in the introduction of the API,” Hunter said. “Using the agreement model as a benchmark to facilitate API agreements can streamline and accelerate the introduction of API technology.” The framework agreement was specifically designed to be consistent with the GFPB`s consumer protection principles: the sharing and aggregation of financial data for consumption (18 October 2017). These principles focus on consumer control and transparency, data security and security, and accountability for all risks introduced into the system. For more information on how the principles of the PCPb were incorporated into the model agreement, click here. One area that was particularly sensitive was which party is responsible in the event of an infringement.
The new model agreement requires data recipients to cooperate with banks on cyber risks and reimburse lenders for all costs associated with an infringement that occurred under their control. To view the chord template and provide feedback, visit www.theclearinghouse.org/connected-banking/model-agreement.