Portability Part 2: Users and Developers

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Recent research reveals that close to 50% of the entire world’s population of 7.9 billion people owns and regularly uses a smartphone. In 2020, the average smartphone user had around 40 apps installed. Of the 40 apps, however, most people only regularly use around 18 of them. And out of those 18 apps, somewhere around 2.5 of them are considered to be financial apps. According to the Intelligence’s Mobile Banking Competitive Edge Study, 89% of people use mobile banking, primarily through an app on their phone. 

User Data Collection

As discussed in Part I of this blog series on Data Portability, essentially all apps are collecting personal data about their users. This data includes obvious things like usernames and passwords, but also more specific information like a user’s purchase history, preferences, cookies, locations, etc. Businesses and apps want to collect this data because it helps them understand their customers better to provide more relevant services, drive sales, and to personalize users’ experiences. 

Recent legislation requires that an app be transparent about their personal data knowledge and collection, so every app or website must follow through to make that information accessible to the public. But even though it’s available, it still takes the consumer’s active participation to know what each app is doing when it comes to their personal info. Apps are supposed to make this easy to access and understand, but unfortunately that’s still not reality for some platforms.

If a user is paying attention, they’ll know exactly which of their apps are tracking them, what information is being collected, and what it’s being used for. But in order to know that, users have to be willing to read the “fine print” details of an app’s label on the app store (there’s now a section titled “App Privacy” on an app’s description that details what data an app uses to track or link to you) or their terms of use. 

In Part I of this series, we further discussed how the data that’s being collected by websites or apps also needs to be portable, or moveable, by users. When it comes to financial data, portability is especially significant because being able to share that data between different platforms can have significant implications for the user. For example, a consumer who uses a mainstream banking app for their mobile banking could greatly benefit from being able to share their banking data with another app that, as one example, helps them budget or pay off loans. Or they may want to share their spending data with an app that provides rewards. When financial data is shareable across different platforms, it has huge potential to profit the consumer in all sorts of ways. 

Some Advice for Developers

Companies are now legally required to make the data they’re collecting portable between different apps or platforms of a consumer’s choice. If you’re a startupper or developer in the finance technology sphere, here are some best practices to consider that pertain to portability (you can also see more on these ideas here). 

First of all, you should decide what data is actually necessary for you to collect. In our data-obsessed world, you could collect as much information about your users, their identities, and habits as you possibly can. But is it necessary? Think about what your goals are and what information about your users is crucial for you to achieve those goals. Decide what specific data will actually help you as a company, and then commit to collecting only that information. 

Second, try to make the portability of your data as easy as possible. This means developing your app so that it easily links to other accounts. Your customers shouldn’t have to go through an extensive or tedious process to share the personal data you have about them with a third party. Make this process as streamlined as possible. 

Lastly, be very clear about your data – what’s being collected, and what are you using it for? How long do you keep it? How can a consumer opt-out of data collection if they want to? This information should be readily available and easy to understand. It should also be clear what third party companies you’re using to collect and port data. You don’t want your users to feel like they’re searching for a needle in a haystack to find this information – state it up-front and make it accessible at all times. 

These three things are a starting point for building positive, trusting relationships with your customers, and all of them are possible if you select reliable partners. When you choose to work with reputable companies and are transparent about it, consumers know exactly what they’re getting. 

Pentadata’s Role in Portability

Pentadata is a financial API company, meaning we bridge the gap between companies and financial institutions. We act as a portability player, being the avenue through which users can access their financial data and then share it with third parties of their choice. Pentadata follows ethical best-practices which include the following:

  1. We don’t collect user data; we simply initiate encrypted communication with financial institutions. And we won’t initiate that communication unless it is requested directly by the customer. 
  2. Our infrastructure, which is SOC2-Type2 compliant, has been inspected and approved by all major financial institutions in the U.S.
  3. We support multiple types of institutions – including banks, credit bureaus, POS, etc. – so we can facilitate any financial portability your users might request.
  4. We utilize a modern web application interface (API) that developers can integrate within days, not months. It’s a fast and easy process.

Pentadata is a proven portability company that has both developers’ and users’ best interests in mind. Our goal has always been to make portability as safe and easy as possible, which is something we achieve on a daily basis with companies just like yours. If you want to know more about how Pentadata works and how we could support what you’re doing, reach out today.

This post is Part 2 of a 5-part series on data portability. You can read Part 1 here. Stay tuned in the upcoming weeks for the next installations.

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