As financial applications continue to evolve, they will need to offer more seamless functionalities to help meet financial challenges and goals. In this chat with GlobalFintechSeries, Kevin Hughes, Senior Product Manager, Aggregation Services at Fiserv discusses his thoughts:
Can you tell us a little about yourself Kevin?
How did you venture into the fintech marketplace and can you share the key highlights from your journey?
I started my career in banking – working in areas ranging from mortgage lending to wealth management – so I had an opportunity throughout my career to see how things work in practice; and I think having that context has helped provide a realistic perspective when thinking about financial applications and what makes them successful. I recall the challenges of managing a back office in wealth management for a large custodial bank, and seeing how information and data – even when it was collected manually – could drive the best decisions and outcomes for customers’ financial lives.
We’d love to hear a little about AllData Connect, what are some of the upcoming innovations planned for the platform?
AllData® Connect from Fiserv is a solution for financial institutions that allows them to provide a secure portal where customers can consent to share their financial data with third parties with which they have a relationship, such as financial management app providers. In the context of data management, AllData Connect will be a valuable additional tool to help our financial institution clients gain insight and transparency into where data is being shared. Our next phase is to develop a dashboard that will give consumers the ability to see who they have agreed to share their account data with and give them a mechanism to easily revoke that consent through an online tool. We are also working with several other aggregation providers to have them participate, believing that scale will drive more value.
When it comes to data aggregation and how financial institutions use data to drive personalized offers and campaigns, what are some of the challenges you see them face despite ease of access to data and tech today?
Data consistency and completeness is probably the biggest challenge in creating personalized offers, followed closely by scope of data access and challenges in acquiring data on a regular basis. There is also a need to make the offers relevant; I use a PFM tool today that creates offers – all of which I ignore – the key is finding a way to use the data to make these offers more valuable(Fiserv).
As changing business environments drive a shift in technology needs even in fintech, how are you seeing the ongoing pandemic change the way digital payments and digital banking solutions are being upgraded/used?
There are two competing trends. Customers are engaging more with digital solutions and becoming more comfortable with relying on them; even users who have historically been reluctant to use them. However, there is more emphasis on fraud and security controls, which leads organizations to limit and restrict data availability – particularly to unknown third parties. There is more sensitivity to credentials being used to gather data, and more controls in place to monitor and identify potential security risks.
As banks/financial institutions adjust to the new normal and adapt new solutions to meet new user needs, what are some of the top thoughts you have concerning this changing landscape? Will neobanks/digital banks be the banks of the future?
I am not sure I would say they will be the future, but I will say that they will drive innovation in ways that traditional banks can look to for inspiration. The use of APIs and easy integration will also allow banks to replicate neobank offers quickly for their customers.
We’d love to hear about a few interesting (global) fintech startups you’ve come across.
The fintech startups I find most interesting are ones that have focused on a very specific use case or application – particularly those focused on financial wellness and planning related to home buying and mortgage applications. Bill payment is another area that seems to be gaining a significant amount of traffic specifically around electronic bill capture and payment options, and the third is point of sale payments via bank accounts – giving consumers a great deal of flexibility, and merchants confidence in reducing risk.
What are some of your predictions for the state of fintech and payment solutions in 2021 and beyond?
The pace of change will continue to accelerate, putting pressure on traditional banks to find and implement solutions faster. The growth of industry organizations like FDX and FDATA will drive consistency and, to some extent scalability, and the CFPB directives will compel banks to evaluate how they make data accessible to consumers. There will be pressure to eliminate screen scraping as a method to acquire data – however, given the amount of data that continues to be accessed in this way, I think such efforts will be met by resistance from the industry and from consumers. Also, applications need to continue to offer value by improving the way that consumers achieve financial goals – there are many applications that are hot one day and cold the next – developers need to look for sustaining solutions that bring efficiency and value to the marketplace(Fiserv).
Before we wrap up, the three parting things you’d share with fintech product leaders?
First, banks and credit unions can and should be valuable partners in the growth of Open Banking; its success is driven by broad exposure to the market. Second, data sharing is what makes the financial ecosystem run smoothly and decisions about data acquisition methods need to reflect that reality. And third, security around the aggregation process is driven more by the aggregation provider than by a specific methodology; if done correctly aggregation and data sharing doesn’t have to introduce additional risk.
Kevin Hughes is the Senior Product Manager, Aggregation Services, Digital Payment Solutions at Fiserv
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