The Financial Data Exchange (FDX) and the OpenID Foundation (OIDF) have announced an agreement to collaborate in order to advance a common technical standard for the secure exchange of consumer financial information.
As online banking evolves and fintech apps grow in popularity, consumers increasingly wish to share their personal account, transaction and other financial information with third parties offering innovative products and services to help improve their financial lives. The use of Application Programming Interfaces (APIs) is seen as a key way to allow this data to be shared securely.
Under the agreement, OIDF has adopted the FDX API (formerly the Durable Data API) as the underlying data specification for their Financial-grade API (FAPI), which enables financial data sharing under the requirements of UK Open Banking as well as the EU’s second payment services directive (PSD2). Authentication and architecture improvements developed by OpenID to support FAPI, have also been incorporated into FDX API as part of the collaboration.
“The financial services community, from banks and credit unions to data aggregators, fintechs and core processors, agree on the benefits of a more open, secure, and reliable approach to financial data sharing,” said Don Cardinal, managing director of FDX. “Our work at FDX has been to develop the technical framework to get it done, and collaborating with OpenID makes this framework stronger and advances our mission toward a common, global standard.”
The FAPI Working Group is building a fintech bridge through open standards and this effort builds on the wide international adoption of OpenID Connect. Specifically, the FAPI Working Group aims to provide JSON data schemas, security and privacy recommendations and protocols to enable applications to utilize the data stored in the financial account; enable applications to interact with the financial account, and; enable users to control the security and privacy settings.
Moving forward, both organizations will continue to collaborate closely on issues of common interest and communicate developments to the marketplace.
“The effort to create a more open financial services ecosystem fosters competition among industry players of all sizes and allows for more innovation in consumer financial products,” said Don Thibeau, executive director of OIDF. “The FDX API represents the latest thinking in the financial API space, and we look forward to the benefits that our joint efforts will bring to the industry and consumers.”
FDX and OIDF wish to recognize the chairs of the FAPI Working Group, Anoop Saxena, Nat Sakimura, Anthony Nadalin, Dave Tonge and FDX specification developer Anil Mahalaha of Fidelity Investments, for their contributions and thought leadership in this space.
About the Financial Data Exchange
Financial Data Exchange (FDX) is a non-profit financial industry organization dedicated to promoting and enhancing a common interoperable standard for securely sharing consumer financial data. Open to financial institutions, fintech companies and other industry participants, FDX puts consumers in control of their personal financial data and facilitates the development, growth and industry-wide adoption of the FDX API’s operating framework. FDX is a subsidiary of FS-ISAC. For more information and to join, visit www.financialdataexchange.org/