The Financial Data Exchange celebrates its one-year anniversary
After adding 72 members to its network, the Financial Data Exchange (FDX) celebrates a full year in operation and reports strong first-year growth. Evie Rusman speaks to the FDX’s Don Cardinal about plans for the future
It is a very happy first birthday for the Financial Data Exchange (FDX). It celebrates the anniversary of its launch by announcing widespread adoption of its API. This benefits more than 5.2 million consumers through a 72-member network.
The Financial Data Exchange was launched in October 2018 to unite the financial industry around a single, interoperable and royalty-free standard for consumer and business access to their financial data, addressing common challenges around the way the industry shares account information. The aim is to enhance security, innovation and consumer control.
Speaking to Verdict Payments, Don Cardinal, managing director of FDX, explains the reason behind its recent success.
He says: “It’s really our members that haven driven this success – pure and simple. It’s their commitment to moving away from held-away credentials and screen scraping that drives this initiative. The way FDX is structured and the inclusivity of our organisation also played a major role.
“We have representation of all corners of the data sharing ecosystem and we work hard to make sure members of all sizes have a voice. It’s a great feeling seeing so many firms work together to build solutions that will benefit the entire financial ecosystem – consumers and businesses alike.”
FDX membership soars
The group’s membership has steadily grown throughout 2019, rising to 72 members from 21 initially. In addition, in January more than two million US customers were empowered through the FDX API.
A recent survey also shows that members reported 5.26m US consumers on the standard and expect to have it rolled out to 8 million customers by year-end and approximately 12m by April 2020.
FDX members include Mastercard, Visa, Bank of America, Citi, American Express and Capital One.
The FDX hopes to expand its global footprint in 2020 and continue to build relationships with international standards bodies. Cardinal tells Verdict Payments: “We are a member-driven organisation, so we’ll focus next on what the membership wants. These are most likely additional data sharing use cases, improvements to the rails to support operational aspects, and other capabilities as members desire them.
“We already have members in the UK and Canada and we will likely follow the data. That is – wherever our members source data from or to, that is where we will go next. As you might remember, the FDX specification is royalty free for anyone to use in perpetuity – anywhere on the planet.”
The principles of data sharing
Cardinal also emphasises the importance of institutions like FDX in a data-sharing world. “In today’s interconnected world, it is highly inefficient to go it alone when trying to solve a problem that affects the entire ecosystem,” he adds.
“In addition, I think all market participants realise they are effectively risk-managers, which could be market, compliance, financial, and of course cyber risks. This successor paradigm helps minimise the risk surface of the ecosystem, doing so freely. That’s a pretty good ROI.”
The Financial Data Exchange recently published its Five Principles of Data Sharing – Control, Access, Transparency, Traceability, and Security – which serve both as operating principles for FDX, and as guidelines for the industry on the essential elements of a secure, transparent approach to the sharing of financial data.
“We believe that account owners should have access to their data and be in control of which aspects they want to share,” says Cardinal. “They should know for what purpose their data is used, which parties have access to it, and ultimately have confidence in the security and privacy of their information.”