The Future is Portable

 In Data, Financial APIs, Financial Data, Privacy & Regulations

In the past five years, the industry of financial technology has made significant progress, especially in the area of financial data access and sharing. Instead of being oblivious, most consumers now have at least some awareness of their own personal data as well as who is accessing it. This is a good start, but we’re working toward a future where consumers will have full control of their data at all times, which opens the door for endless consumer benefits. 

What have banking and fintech been working on to make this future possible? To sum it up: portability. Simply put, data portability lets consumers own their data and decide how it’s used. In this quest, we’re currently at a point where the consumer has some ability to control and move data about them that’s collected by third party entities, rather than using their financial institution as a gate-keeper for that data. Over recent years, consumers have increasingly been able to personally move their information between services, apps, and IT environments to best meet their needs. 

What’s driving this change? Essentially it’s the regulatory activity focused on increasing online privacy. Since 2016 and 2018 respectively, the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have truly gotten the ball rolling for data portability. While the CCPA was born out of U.S. legislation and the GDPR is EU-based, they both focus on this novel concept of portability. Both acts focus on the belief that individuals should be able to obtain, move, copy, transfer, and reuse their own personal data. The CCPA and GDPR assert that consumers have a right to not only know what data is being collected about them by an organization; they also should be able to share that data in a readable form with other organizations. In other terms, this legislation requires that all data collected be portable. 

We believe consumers should be able to share their data with whomever they want, but they also should be able to stop sharing their data with whomever they want, whenever they want. This capability doesn’t exist – yet – but through ongoing collaboration between entities that care about privacy, it’s on the horizon. 

Portability involves three different entities: data sources, data recipients, and data portability platforms. Data sources are things like banks or other financial institutions and data access networks. While they support the idea of data portability, they aren’t able to do it themselves. Data recipients are mobile wallets or consumer apps – basically platforms that focus on consumer experiences but can’t deal directly with financial institutions. So finally, data portability platforms exist to bridge the gaps between sources and recipients by providing the mode through which data can be transferred. 

Data portability is definitely attainable, but one key element for making it possible is collaboration. It will take all of us in related industries working together to make portability a reality. As we at Pentadata have worked toward the goal of full data portability, we’ve learned three main things:

  1. We have to move fast but shouldn’t rush. The industry is changing at exponential speeds, and we have to keep up. But big changes require time, so we need to balance innovation with patience and wisdom. 
  2. Technology needs to respect privacy. Just because we can do something doesn’t mean we should. We need to make sure to collaborate with other organizations who have the same values and commitment to consumer privacy. 
  3. When in doubt, let the consumer choose. At the end of the day, the products we build are for consumers, so it’s important to know and apply their desires to what we’re creating. 

In the end, our industries should be focused on creating a better experience for consumers, and we believe data portability is a huge part of that. So let’s work together to create a future where customers own their data and have the ability to control who gets it. For we believe that when full portability becomes reality, the possibilities for good will be endless.

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