Charles Schwab to Work with Finicity to Enhance Security of Customers’ Data via Open Banking Solutions

Finicity, the provider of a real-time financial data aggregation and insights platform, has reportedly entered a direct data agreement with Charles Schwab (NYSE:SCHW), the world’s third-largest asset manager (behind BlackRock and Vanguard) and the 14th largest banking institution in the US with over $3.3 trillion in client assets.

Through the partnership, both organizations will focus on enhancing the security of consumer-permissioned data by using an API. The Open Banking API will be used to share data. Schwab’s customers that work with third-parties and apps that use Finicity solutions may securely connect to and provide direct access to their financial account data.

Steve Smith, CEO and co-founder at Finicity, stated:

“Finicity is committed to delivering our clients superior data access, quality, and security so that they can change the way their customers interact and benefit from their own financial data. We are helping consumers to become more empowered with their financial data and utilize it in ways that improve their financial lives.”

The API integration with Charles Schwab aims to offer access to client-permissioned financial account data to various services providers. The data should help Fintech firms and financial institutions with offering better asset management, payments, and lending services.

The direct API experience will allow customers, through their Schwab account relationships, to provide access to their financial data.

Finicity and Charles Schwab both use the Financial Data Exchange (FDX) API specificationwhich  leverages Open Authorization (oAuth) technology. This eliminates the need for the user to share credentials when providing access to their data.

Finicity has managed to form relationships with many service and application providers that allow consumers and businesses to better understand, manage, and control key financial processes. This may include budgeting, saving, borrowing, transacting, investing and lending.

Finicity works with widely-used PFM (personal financial management) tools, large lenders and payment providers. As reported in June 2020, Mastercard acquired Finicity.

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