TD Partners with Finicity for Open-Banking Agreement

Need to Know

• The new data-access agreement will allow TD to transfer customer financial data to Finicity via API.
• Leveraging Finicity’s data tech will allow TD to offer customers the option to stop inputting banking credentials, such as passwords, with third-party financial management services.
• TD joins an increasing list of financial institutions that are investigating data aggregation for a more seamless customer experience.

Analysis

As more traditional banks are looking for ways to offer digitally innovative products and services to their customers, TD has signed on with fintech company Finicity in an agreement that will allow the North American bank to utilize Finicity’s open-data platform.

The partnership, which was announced on Friday, will give TD access to Finicity’s Application Programming Interfaces (APIs). Customers can request to have their banking credentials—such as account numbers and passwords—shared with Finicity through its API, which will then eliminate the need for account holders to directly share such information with third-party financial management apps and services who access Finicity’s open-data platform. This will provide better security and data privacy for TD customers.

“The significant surge we have seen in the adoption of our own digital products and services has accelerated our work to leverage a market-developed technology solution to help increase the comfort level of customers looking to access digital services that are outside their bank,” said Rizwan Khalfan, chief digital and payments officer at TD. “Our customers want digital solutions and we are focused on supporting their choices.”

TD’s partnership with Finicity responds directly to customers’ need to securely share data across financial platforms outside of their home bank. “We are committed to delivering superior data access, quality and security through the Finicity Open Banking platform, transforming the way consumers interact with and benefit from their own financial data,” Finicity CEO Steve Smith said of the TD agreement. “Together with TD, we are helping consumers to become more empowered with their financial data and utilize it in ways to help improve their financial lives.”

Finicity’s open-banking API has already proven popular in the traditional financial arena. Last month, Mastercard purchased the fintech company for $825 million. When the purchase was announced, Mastercard CEO Michael Miebach called open banking “a growing global trend”; indeed, earlier this year, Mastercard competitor Visa purchased Plaid, itself a data aggregator, for $5.3-billion.

For its part, TD has been long committed to digital innovation, and to investigating new, innovative ways for consumers to securely manage their finances online. The bank is a founding member of the Financial Data Exchange (FDX), a US-based organization that promotes better-protected customer data, which launched in Canada last month. The organization’s core goal is developing a “secure and interoperable” international API standard for data-sharing within the personal finance space. TD also recently invested in Akoya, which will provide an API-based network for safer financial data sharing.

As customers move away from traditional banks and towards mobile and more digital-forward financial solutions, open banking has become a hot topic. The core tenet is promoting a more competitive and innovative financial ecosystem, and potentially create new revenue channels for financial institutions such as TD.