New offering makes it more efficient for fintechs and aggregators to provide crucial information for financial institutions to assess their risk and controls as they engage in data exchange agreements
New York, January 26, 2021 – Financial industry leaders are launching a new service to make it more efficient for financial apps and data aggregators to provide assessment information to financial institutions (FIs), and for each FI to conduct its own risk assessment. The Streamlined Data Sharing Risk Assessment provided by TruSight and KY3P® by IHS Markit – third-party assessment services — incorporates work developed through The Clearing House’s Connected Banking initiative to standardize and streamline risk evaluations of data aggregators and financial apps.
Today, each time a FI wants to establish or renew a connection with a financial app or an aggregator, it separately requests and receives the information relevant to its risk assessments, resulting in redundancy and inefficiency that slows the process of signing and executing agreements with data exchange partners. This new centralized service can streamline the process for FIs, financial apps, data aggregators, and others as they look to help consumers safely share financial information.
The Streamlined Data Sharing Risk Assessment was piloted by The Clearing House with participation by Finicity, Plaid, Bank of America, JPMorgan Chase, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo.
“This centralized approach can reduce the need for financial apps and data aggregators to provide the same risk information again and again as they engage in data exchange agreements with FIs,” said Ben Isaacson, Senior Vice President and Connected Banking Product Executive at The Clearing House. “It aims to help financial institutions of all sizes meet their risk requirements more efficiently and cost effectively.”
The Clearing House’s Connected Banking initiative determined what information the apps and aggregators needed to submit to satisfy due diligence requirements. The initiative seeks to enable the transmission of bank-held financial data via APIs to fintechs in a more secure way, while improving customers’ control and visibility of the financial data they choose to share.
“Open banking is transforming the way consumers and organizations are able to share and benefit from their financial data,” said Ryan Christiansen, senior vice president of data access partnerships, Finicity. “As an industry, we have a responsibility of supporting these efforts with the highest levels of security. This pilot – and the programs that will follow it – will help deliver that in a streamlined and simplified process.”
TruSight, which performed the pilot assessments, was able to streamline and simplify information gathering from participating data aggregators and then provide it over a secure platform to each of the participating financial institutions. The streamlined process gathers a large portion of the information required by financial institutions, potentially reducing the need for lengthy follow-up information gathering.
A key focus of the Connected Banking initiative is facilitating the use of APIs to connect banks, data aggregators, and fintechs, giving consumers control and visibility into how they share their data. The Clearing House is a founding member of Financial Data Exchange (FDX) and encourages the use of the FDX API for secure and transparent data sharing.
ABOUT THE CLEARING HOUSE
The Clearing House operates U.S-based payments networks that clear and settle more than $2 trillion each day through wire, ACH, check image, and the RTP® network. It is the nation’s most experienced payments company, with a long track record of providing secure and reliable systems, payments innovation, and strategic thought leadership to financial institutions. Most recently, The Clearing House has revolutionized U.S. payments infrastructure with the RTP network, which supports the immediate clearing and settlement of payments, along with the ability to exchange related payment information across the same secure channel. These RTP capabilities enable all financial institutions to offer safer, faster, and smarter digital transaction services for their corporate and retail customers. Learn more at www.theclearinghouse.org.
TruSight is the industry’s leading third-party risk management (TPRM) utility platform, facilitating efficient and cost-effective collection of accurate third-party risk data. Created and backed by five of the largest global financial institutions, including American Express, Bank of America, Bank of New York Mellon, JPMorgan Chase, and Wells Fargo, TruSight combines best practices and standardization to execute comprehensive risk assessments once and deliver to many – enabling financial institutions to gain greater visibility into potential risks and manage third-party relationships more efficiently and effectively.
IHS Markit (NYSE: INFO) (https://ihsmarkit.com/index.html), is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, IHS Markit is committed to sustainable, profitable growth.
KY3P® is a central, cloud-based platform for vendor onboarding, collection and verification of due-diligence data and vendor-risk monitoring covering a range of third parties, including vendors, affiliates, sub-advisors, distributors, clearinghouses and other service providers in the financial industry.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2021 IHS Markit Ltd. All rights reserved.
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