A recent survey noted that 50% of people use a minimum of two banking or finance apps, while a whopping 20% use five or more financial apps on a regular basis. Only 18% of the worlds banking customers report not using any financial apps at all. As financial customers continue to demand more access to financial data via digital methods, it is only natural that they will begin to pursue options that can simplify the way their financial information is managed digitally. Banks are meeting that demand by utilizing account aggregation, also known as financial data aggregation.
What is a Data Aggregation Service?
A financial data aggregation service provides a link between consumers banking accounts, budgeting systems, credit card accounts, and financial planning software and pulls it together into one streamlined location, typically through an online app or web based site. Once a user has connected their various financial platforms into one location, they are able to get a full picture of their various assets, liabilities, spending habits, investments, etc., in effect creating a personal wealth management tool completely centered around their financial health.
Financial institutions are able to connect to data aggregation services by utilizing an application programming interface (API). API’s provide a secure connection between computer programs, in this case allowing you to link your various financial platforms together safely and securely.
Are API’s Safe?
Application programming interfaces are considered to be the gold standard for connecting unrelated computers or computer programs to each other, API’s allow bank customers to use third party applications without giving up their login credentials, API’s also limit the scope of data the aggregator software is allowed to access, the majority of banks in the U.S, including Meadows Bank will only allow a connection to an account aggregator software to occur if that platform utilizes an application programming interface.
Benefits of Financial Data Aggregation for consumers?
Financial aggregation services pull in financial information and combine it into one interface, allowing the user to manage their personal finances from a single dashboard, thus saving the user time and allowing them to have a true and up to date view of their financial well being as a whole. Many financial aggregation products offer personalized financial advice, and budgeting tools based on the data which has been compiled from the users various financial platforms and are able to provide insights on saving, investing and even tips on increasing the users credit score.
How Can I Protect Myself When Using Financial Data Aggregation Platforms?
First and foremost, DO YOUR RESEARCH do not download apps with poor reviews from your app store, Do not download apps that do not have a large number of previous downloads.
Ask for recommendations from your friends, business associates and banking representatives.
Only download apps from a trusted source; specifically your Google Play store or for IOS users your official App store.
Never click a link within an email or web page to access an app, fraudsters may be tricking you into accessing a copycat app in an attempt to steal your login information.
Change your passwords frequently and be sure to select a password that is not easy to guess.
Never share your password.
If something doesn’t feel right, don’t do it, trust your instincts.