Wells Fargo bids to solve third-party data exchange conundrum
08 June 2016 | 7664 views | 1
Wells Fargo has moved to tackle the tricky issue of how it shares customer data with other firms, agreeing a new exchange method with small business accounting software outfit Xero that it hopes will provide a blueprint for other partnerships.
With bank clients increasingly wanting to share their data with third parties, Wells has built an API designed to give users better online security and greater control over what financial information they choose to share.
Specifically, the method creates a secure, tokenised 'handshake' between the Wells and Xero servers. The API eliminates the need for Xero customers to share their Wells Fargo usernames and passwords, and the need for Xero to store them in order to retrieve Wells Fargo account data.
Brett Pitts, head, digital, virtual channels, Wells Fargo, says: "We routinely counsel our customers to never share their username or password. We are glad to provide a system that enables our customers to securely access their account data in third-party software, gives our customers more control of the data they share, and removes their credentials from the data sharing transaction."
The service will begin rolling out for new Xero customers who have Wells Fargo accounts in July, with existing clients that use both firms migrated in the fourth quarter.
Wells Fargo is also talking to other firms about the new method, which it believes could help solve a serious concern for banks. Earlier this year JPMorgan boss Jamie Dimon warned that the increasing trend of clients allowing third parties such as payment firms and aggregators to access their bank accounts "warrants special attention".