The world of finance and banking is changing, and as technology continues to evolve, consumers are looking for new and innovative ways to manage their finances. As security threats to financial data come and go, it is more important than ever to find banking methods that are safe and convenient for online transactions.
In fact, this aspect of banking is so important that 72% of U.S. consumers rank the ability of a bank to connect to online apps and services safely and securely as a top priority when choosing banking services.
Fortunately, Open Banking makes this kind of service possible, mainly through FDX (Financial Data Exchange). In this article, we will explore what FDX is, how it works, the benefits it provides to consumers, and how it shapes the future of finance.
What is Financial Data Exchange?
“Financial data exchange" is a general term that refers to the exchange of financial data between different parties. On the other hand, the Financial Data Exchange (FDX) is a non-profit organization that aims to drive the adoption of Open Banking in the U.S. and Canada. FDX does this by providing standard tools for the reliable exchange of financial data between different parties.
The primary goal of financial data exchange, according to FDX’s system of Open Banking, is to provide consumers with a more secure and convenient way to access and share their financial data.
To this end, Financial Data Exchange provides a standardized method for sharing financial data between financial institutions and third-party providers. By doing so, FDX aims to improve consumers' ability to access and control their financial data, whether those consumers are vendors, businesses, or private individuals.
What is the FDX API Standard?
FDX’s standardized method for open finance is an application programming interface known as FDX API. It is a set of tools that provides a secure and reliable way to access financial records. These tools support best practices for privacy and ensure that users have complete control over their financial data.
The FDX API standard includes standards for secure authentication and authorization. It also includes user experience guidelines defining initiating, disclosing, and selecting data providers, endpoints, and data structures for specific use cases. These tools enable financial institutions and third-party providers to exchange financial data smoothly and safely every time a transaction gets made.
With over 32 million consumers already using FDX API, the utility and reliability of the standard are proven. As more and more financial institutions adopt FDX standards, consumers will be able to access and share their financial data more securely and efficiently.
How Does Data Sharing Benefit Consumers?
Data sharing is essential for consumers to access and control their financial data. But such data sharing can sometimes be delayed when it passes through different networks, making it more difficult for consumers to make quick financial decisions.
If you are working with stock, for instance, you need to be able to make quick decisions to capitalize on ideal conditions in the stock market, which can become a difficult task without your most recent financial information.
If they can share data quickly over an interconnected network, financial institutions, and third-party providers can provide consumers with more up-to-date and reliable information about their finances. This information can help consumers make better decisions and manage their finances more effectively.
With FDX standards in place, consumers can take confidence that their financial data is secure. They don’t have to share it with third parties over less-secure networks to review recent financial developments or complete transactions, making their data less vulnerable to security breaches.
With FDX, consumers can also access financial data from multiple sources without navigating different systems and interfaces. Data partners such as banks also benefit from FDX API, as it helps them to easily connect and exchange data without exhausting resources to support every one of their clients.
How Can Trustly Help You Utilize The FDX API?
Financial data exchange is an exciting development in the world of finance, providing consumers with more secure and reliable ways to access and control their financial data. By adopting FDX standards, more financial institutions and third-party providers can work together to make it easier for consumers to access their financial data across multiple sources.
Trustly is a leading provider of Online Banking Payments, and we have recently joined the FDX family to further drive Open Banking in North America. Our services take full advantage of FDX API, enabling consumers to enjoy more convenient and secure financial transactions.
Our mission at Trustly is to utilize Open Banking technology to provide fast, simple, and secure transactions and to put consumers in control of their own financial data. This aligns with FDX's mission of “unifying the financial industry around a common technical standard for secure, convenient, and transparent consumer access to financial data.” Members of the Trustly team work hand-in-hand with FDX to continue Open Banking progress and adoption in the U.S. and Canada.
"Our continued collaboration with FDX is critical to the continuous improvement of financial data sharing. Trustly fully supports and aims to contribute to FDX's goal: creating industry standards around security, innovation, and consumer control.”
- Eric Foust, VP Banking Partnerships, North America
Trustly: FDX Standards in Action
With the increasing adoption of the FDX API standard, more and more consumers can benefit from improved data sharing and faster transactions. Trustly pledges to provide fast, simple, and secure online banking payments at the highest standards for data sharing.
To learn more about how Trustly can help your company or institution build your financial services to the FDX API standard, contact us today. Learn more about Trustly’s Open Banking Payments today and see the difference that financial data exchange can make for your finances.