Taming the screen scraping problem
Millions of customers who use third-party finance apps are embracing Wells Fargo’s data exchange technology to ensure more control and security for their personal banking information.
Consumers have flocked to online personal finance apps for years to help them manage their money. Most apps have come from nonbank financial technology firms — or fintechs — that gain access to a customer’s bank accounts using a customer’s online banking user name and password. At sign up with a fintech app, customers are typically asked to disclose their online banking credentials so the company can capture their data through “screen scraping” — a practice where the fintech app logs into the customer’s online banking account and pulls the customer’s financial data into the third-party app interface.
But it is a practice that is gradually waning, as major banks like Wells Fargo and others have developed a better way for their customers.
The banks have formed data exchange agreements with fintech apps and aggregators that could eventually eliminate the problematic aspects of screen scraping, such as the sharing of online banking credentials and the lack of customer control over their own data. These agreements are based on application programming interface (API) technology — a secure data connection that a growing number of customers have embraced.
In fact, more than 3 million of Wells Fargo’s customers have connected their data to third-party fintech apps using the bank’s API since it began forming data exchange agreements about four years ago. The company expects that number to grow significantly this year.
With its latest data exchange agreement in late 2020, Wells Fargo made a significant impact in the banking industry’s effort to corral screen scraping, industry analysts say.
The company’s Sept. 24 agreement with Envestnet | Yodlee, a leading data aggregator for digital financial services, was regarded as a milestone in the industry. Wells Fargo has now confirmed plans to transition 99% of current third-party financial app screen scraping on its site to a data exchange connection powered by API technology.
The Envestnet | Yodlee agreement will be phased in over the next few years. It was Wells Fargo’s 17th data exchange agreement, including deals with makers of personal finance apps, small business accounting apps, and financial data aggregators.
“This certainly makes Wells Fargo one of the early movers in this space,” said Stephen Greer, a senior analyst and emerging technology specialist for Celent, a research and advisory firm.
For Wells Fargo customers, it means stronger privacy and security when they use third-party apps for services like budgeting or financial planning. Once Wells Fargo integrates with Envestnet | Yodlee (or other data exchange partners), customers will no longer have to give their bank account passwords to the app providers they use.
As a result, third-party app providers can no longer see or save a user’s account credentials. Instead, they receive a digital “token” that allows them to access only the data that a customer permits them to access, through an API-based secure pathway between the bank and the app provider.
“For customers, the API runs seamlessly in the background, like a home security system,” said Ben Soccorsy, senior vice president in Wells Fargo’s Strategy, Digital and Innovation group. “With the API connection, customers are able to see and control data they’re sharing with third-party apps via the bank’s Control Tower® digital experience,” he said.
“This gives our customers greater control and transparency over the financial information they choose to share with third parties and gives them the ability to manage those things on an ongoing basis through Control Tower,” Soccorsy said.
As users have flocked to online and mobile banking during the COVID-19 pandemic, Control Tower and data sharing transparency and controls “have resonated with customers more than ever,” he said.
A sense of control
“Wells Fargo stands out with its pairing of Control Tower and data exchange security, which gives consumers more confidence in their online shopping, banking, and other digital activity,” said Alenka Grealish, a senior analyst and corporate banking specialist with Celent.
“What Wells Fargo is doing is to give us a greater sense of control, normalcy, and peace of mind,” Grealish said. “That’s a powerful thing for Wells Fargo to have in its consumer banking showcase.”
Welcomed technology for consumers
“Americans do so much online these days that requires giving out their personal data, they would welcome the added security that Wells Fargo’s data exchange technology offers,” said Tiffani Montez, a senior analyst and retail banking specialist for Aite Group.
“Having a better, more secure way to give access to their data can help them alleviate their stress, guide them out of delinquent financial situations, or keep track of their financial goals. And it can be a competitive differentiator for the bank,” she said.