Controlling How Your Financial Data Is Shared Could Get a Lot Easier

Summary

WSJ Your Money Briefing – “Controlling How Your Financial Data Is Shared Could Get a Lot Easier”

Date: February 21, 2020
Host: J.R. Whalen, The Wall Street Journal
Guest: Justin Baer, WSJ Investing Reporter

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Episode Overview

This episode explores how new technology and industry initiatives may give consumers more power over how their financial data is accessed and shared by third-party apps. Wall Street Journal reporter Justin Baer discusses Akoya, a Fidelity-backed platform aiming to put consumers in control of their financial information amid increasing concerns from both consumers and banks about privacy and data flow.

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Key Topics & Discussion Points

The Current Problem: Data Access by Finance Apps

• Finance apps like bill payers, budgeting tools, and tax preparation software routinely require users to link their bank or brokerage accounts.
• Once linked, these apps can currently access a broad swath of personal financial data, with few restrictions or parameters governing exactly what information is shared—or for how long.
• Justin Baer (00:49):

  “The issue... as these have grown more popular is that there are not really a lot of parameters around the information they can take. And if you were to stop using that app, the flow of that data doesn’t necessarily stop when you delete that app on your phone.”

How Most Apps Access Data: The Risks of “Screen Scraping”

• Many apps require users to provide their log-in credentials, after which the app “acts as” the user, pulling whatever information it deems necessary.
  • This often gives apps more access than users intended and does not necessarily end if the app is deleted.
• Justin Baer (03:28):

  “That’s essentially giving your log information to an app, they sign in and they kind of take whatever they want, even if it necessarily goes beyond the scope of what you want them to have.”

Introducing Akoya: The New Intermediary

• Fidelity Investments has created Akoya, a platform designed to serve as a middleman between financial institutions (e.g., banks, brokers) and personal finance apps.
• Akoya will enable users to approve or deny data sharing requests at a granular level—down to specific types of data or specific accounts.
• With Akoya, users provide permission directly via their financial institution and can revoke access at any time, even after authorizing an app.
• Justin Baer (03:46):

  “You’ll be able to do that... specify which accounts... And then after you’ve established that link, you’re able to go back to that... You’ll also be able to say, you know what, I no longer use that app... I want you to shut off access starting now.”

Industry Dynamics: Why Fidelity Spun Off Akoya

• Banks were hesitant about Fidelity, a major financial player, controlling a central hub for sensitive data.
• By spinning Akoya off as an independent company, the hope is to eliminate competitive concerns and encourage more major banks to participate as customers and investors.
  • Justin Baer (04:24):

    “Fidelity is in its own right this giant financial services company... [Some banks might ask] why do I want them in this sort of central hub of data? ... The spinoff became one way to eliminate that.”

How Akoya Plans to Make Money

• Akoya’s customers will be financial institutions, not individual consumers. Banks and brokers would pay Akoya a subscription fee to use the service.
• For users, Akoya remains invisible; any interaction appears as a branded extension of their usual online banking environment.
  • Justin Baer (05:17):

    “Their customers are the financial institutions. So they would pay a fee... the consumer... won’t necessarily know of their existence. Whatever they do will be an extension of their relationship with their financial institution.”

Will Banks Sign On?

• It’s not a foregone conclusion that all major banks will adopt Akoya. Some may pursue their own solutions or favor early-stage competitors.
• Akoya hopes early investor participation will attract others, but the outcome is not guaranteed.
  • Justin Baer (06:02):

    “I don’t think so at all. ... Many of those institutions... may have their own ideas about how they want to do this. ... There are a number of other early stage startups that are pursuing the same idea.”

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Notable Quotes & Memorable Moments

• On persistent data sharing after deleting apps:

  “The flow of that data doesn’t necessarily stop when you delete that app on your phone.” — Justin Baer (00:57)

• On screen scraping risk:

  “They sign in and take whatever they want, even if it ... goes beyond the scope of what you want them to have.” — Justin Baer (03:28)

• On user controls via Akoya:

  “You’ll also be able to say... I want you to shut off access starting now.” — Justin Baer (03:46)

• On industry skepticism:

  “It’s not set in stone... many may have their own ideas about how they want to do this.” — Justin Baer (06:16)

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Important Timestamps

• 00:36 – Host J.R. Whalen introduces topic: consumer data sharing with financial apps
• 00:49 – Justin Baer explains risks & lack of controls in current data-sharing model
• 01:45 – How Akoya works as a middleman platform
• 03:28 – Explanation of “screen scraping” and data overreach
• 03:46 – New granular user controls Akoya would offer
• 04:24 – Why Akoya was spun off from Fidelity
• 05:17 – How Akoya makes money (business model)
• 06:02 – Skepticism over universal bank adoption

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Summary

This episode unpacks the risks involved in allowing apps direct access to your financial information and highlights Akoya as a new solution putting control back in consumers’ hands. While Akoya could soon make it possible for users to precisely decide what, how, and when their financial data is shared, the initiative’s success depends on widespread buy-in from major banks—a process that remains uncertain amid competition and industry concerns.

The tone: Conversational, practical, focused on clear explanations for personal finance audiences.

Bottom line: The way you share your financial data with apps could soon become far more secure, selective, and easy to control—if financial institutions get on board.

Transcript

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Consumer Advocacy Group Representative]

Tell Congress, stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.

[J.R. Whalen]

Here's your Money briefing. I'm J.R. whalen at the Wall Street Journal in New York. There are all sorts of handy finance apps that help you do things like pay the mortgage and manage your money. But what happens when you give them direct access to your bank account?

[Justin Baer]

The issue that has emerged as these have grown more popular is that there are not really a lot of parameters around the information they can take.

[J.R. Whalen]

That's Wall Street Journal investing reporter Justin Baer. He'll discuss a new service that'll let customers decide just how much financial data they want to share. That's next. Lots of us use apps that link to our bank or brokerage account to pay bills or prepare tax returns or plan for retirement. But those apps also are grabbing lots of personal financial data along the way, and some banks are growing concerned. Well, a new service called Akoya is being fast tracked that'll put customers in charge of their data. Wall Street Journal investing reporter Justin Baer is here with details. So, Justin, Fidelity Investments is the brains behind Acoya. What are they doing with the service?

[Justin Baer]

Sure. This is a platform that basically sits between the financial institutions, the banks and brokers that you might have accounts with and the various applications. So the online apps that, as you said, might help you plan your taxes, plan retirement, create a budget. And historically, those apps are populated by the data that you store inside of your various accounts. And so at some point in that process, when you sign up for those apps, they ask you essentially permission to go to your financial institution and take that data. The issue that has emerged as these have grown more popular is that there are not really a lot of parameters around the information they can take. And if you were to stop using that app, the flow of that data doesn't necessarily stop when you delete that app on your phone.

[Interviewer]

So, like, if you use TurboTax and you wanted to populate your tax return, you say, go to my Wells Fargo, my Bank of New York account, and grab all the relevant data and bring it in.

[Justin Baer]

And one way to look at it is that you're giving A lot of those apps, your login credentials, and they're essentially pretending that they're you in signing on to your bank to take that information. So what this, what, what this service does is essentially sit in between those two parties and allow the, when you get that request from that app to say, hey, we'd like to grab this information. You don't have to give them your log information. It basically sits in a box and you sign in into that account and you direct that account and give explicit permission to give the app whatever it is, a certain kind of information.

[Interviewer]

And so that is screen scraping.

[Justin Baer]

Yeah. So that's essentially giving your log information to an app. They sign in and they kind of take whatever they want, even if it necessarily goes beyond the scope of what you want them to have.

[Interviewer]

So if this all comes to fruition,

[J.R. Whalen]

will customers be able to pick and

[Interviewer]

choose what data the app is able to find?

[Justin Baer]

Yes. So you'll be able to do that. You'll be able to specify which accounts, if you have multiple accounts within each institution. And then after you've established that link, you're able to go back to that. And it's basically going to be housed on the website of whatever bank or financial solution you have an account. You'll also be able to say, you know what, I no longer use that app, or I don't like it or I found another one. I want you to shut off access starting now.

[Interviewer]

The banks were a little uneasy with this being held by Fidelity before it was to be spun off. Does that spinning off fast track this to possible fruition?

[Justin Baer]

That certainly Ekoi's hope. I think they wanted to eliminate what sub might perceive as a barrier to having people sign up. Meaning, well, wait a second, Fidelity is in its own right. This giant financial services company, I bank A or broker B, compete with them in a million different ways. Why do I want them in this sort of central hub of data? And so I think that became spinoff became one way to eliminate that as a potential reason why you wouldn't participate. The other way is essentially in the hopes of getting what are essentially the biggest banks in the US on board faster. Meaning if they have some skin in the game, if they're investors in this thing, are they more likely to sign up as customers?

[Interviewer]

What's the cash flow? How does the company behind Akoya make money?

[Justin Baer]

Sure. Their customers are the financial institutions. So they would pay a fee, subscription, I guess, in order to participate in this. And then, you know, the consumer, the account holder won't see a COIA won't know necessarily of their existence. This, whatever they do, will be an extension of their relationship with their financial institution.

[Interviewer]

So they might just see the branding of Chase, Wells Fargo, what have you.

[Justin Baer]

Yes. So there'll be a prompt that jumps up and says, hey, we're getting this request for data. Sign in and let's decide what you want to share with them.

[Interviewer]

So is it a done deal? Is it a foregone conclusion the banks will sign up for this?

[Justin Baer]

I don't think so at all. I think we'll see how many of the investors they probably have a pretty. I would imagine they have a good chance of getting most of their investors to sign on and sign on relatively quickly.

[Consumer Advocacy Group Representative]

But.

[Justin Baer]

But it's not set in stone. And many of those institutions, including the many that didn't, may have their own ideas about how they want to do this. There are those firms that could say, well, I'm happy with having control of it myself, or my understanding is that there are a number of other early stage startups that are pursuing the same idea. I think in talking to people who watch the space, I think there's certainly an advantage to being out there first and have these investors lined up. But it hasn't happened yet. We'll have to wait and see.

[J.R. Whalen]

Okay.

[Interviewer]

That's Wall Street Journal investing reporter Justin Baer with us. Justin, thanks for coming on the show.

[Justin Baer]

Thanks for having me.

[Interviewer]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Representative]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See, banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Representative]

they need while increasing megastore profits. They deserve it, don't they?

[Consumer Advocacy Group Representative]

Tell Congress. Stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.