Banking customers often share their financial data on external platforms, such as budgeting tools and accounting software, to help them manage their money.
But for financial institutions, giving out that data can come with security risks.
One popular way to transfer banking data to other applications is “screen scraping,” in which a bank’s customers share their login credentials with a third-party app that then mimics user behavior to pull financial data onto the external platform.
Taira Hall, the head of enterprise payments strategy at Citizens Bank, told Business Insider the practice poses several risks to customers. Cybercriminals can exploit the third-party app to gain access to the customer’s account, and the screen scraping software may misread data and display outdated or inaccurate information.
To address these issues, Citizens built an open banking API, or application programming interface, a type of technology that allows software to “plug in” and access data from other software.
The tool is designed to let customers securely access their financial data, such as balances and recent transactions, on external platforms without the need for screen scraping.
Data sharing for customers
The new tool relies on the concept of open banking, an idea that emerged in the early 2000s when online banking became more common. In its most basic form, open banking allows customers to share their financial data with service providers other than their bank.
Today, sharing data for consumers via open banking API is standard. Citizens’ API, however, allows commercial customers to do the same.
Ravi de Silva, the CEO of De Risk Partners, a consortium of financial consulting firms, told BI that open banking creates a foundation for more personalized, efficient, and transparent financial services.
“Instead of locking customer data inside a single institution, open banking empowers individuals to use their own data to access better lending options, budgeting tools, and other financial services,” said de Silva, who was the global head of compliance testing at Citigroup before founding De Risk Partners. “It shifts the balance of control toward the consumer, not the institution.”
Citizens’ commercial customers, such as stores, restaurants, and business service providers, may use open banking data to automate expense tracking or verify income for gig workers, while other banks can use the data to assess borrower risk in real time instead of relying on credit scores. The API provides access to a wide range of financial data in one place, allowing customers to easily gather information from sources like invoices and payrolls.
“Normally, commercial customers need to go through time-consuming and complicated processes involving paperwork and implementation in order to get their data from bank to external platform,” Hall said. “But with the open banking API, all that’s needed is linking their Citizens accounts from within the external platform, and the data starts to flow automatically.”
Other banks, such as Deutsche Bank and Wells Fargo, have also developed opening banking APIs for their commercial customers.
A streamlined data platform
Citizens’ API uses a data aggregator as a middle layer between the bank and the external platform. Instead of the bank connecting to each individual platform, it connects to a central data aggregator that can then transmit customer data, once the customer has given permission.
Hall said the API removed the need for clients to work with anyone from Citizens to share their data. It also eliminated the security risks associated with practices such as screen scraping.
The API was built largely in-house through a collaboration between Citizens’ technology, product, risk, legal, and cyber teams. Hall said the primary challenges were getting the tech to work and forming relationships with the companies that aggregate the data.
Hall said the API had seen “significant” use both by consumers and business clients since it launched in March. She added that the bank had also seen a 95% reduction in screen scraping, which they measured by tracking how often financial data aggregators accessed their website.
The future of financial data
Looking ahead, de Silva said open banking would most likely evolve beyond checking and savings accounts to include data from pensions, mortgages, and investments.
“We may also see deeper integration of AI that turns financial data into predictive insights, helping consumers make smarter decisions about their money,” he said.
“And as privacy regulations mature, we’ll likely see a shift toward greater consumer ownership and portability of their financial identity.”
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