Nuts, Bolts And Risks Of Data Aggregation
North American Precis Syndicate
Financial data aggregation puts information about your financial holdings under one roof. Your “dashboard” can display your investments, savings, insurance policies and credit balances. (NAPS)
(NAPSI)—If putting all your financial information online and in one
place sounds like a good idea, there are many companies—often called
data aggregators—ready to help you organize your financial life.
However, before you share your account information and other sensitive
financial details with data aggregators, it pays to know how these services
operate and how to protect yourself from potential privacy and security
Some data aggregators provide a single place to view a simple snapshot of
your overall finances. Others offer financial and tax planning, budgeting,
and the ability to track home value and mortgage information. Some provide
additional options, including portfolio analysis, advice, credit monitoring,
bill paying and more. Depending on the provider and services you choose, you
can be charged monthly or annual fees for data aggregation.
You can aggregate information through a nonfinancial
organization or add information from outside financial accounts to an
existing financial provider, such as a bank or investment firm. In either
case, aggregation is possible because you provide the aggregator with the
log-in information for your financial accounts. For example, say you want to
aggregate and track information from an IRA, a 401(k) account, a savings
account and two credit cards, all residing with separate financial
institutions. To create a single dashboard, the aggregator will ask you to
provide five separate sets of log-in credentials so that it can access each
one of those financial accounts.
Your security credentials let the aggregation service grab or “scrape”
this data, often daily. Scraping is an automated process involving a code
that goes to the chosen account websites, registers using your security
credentials, and collects applicable account information.
As an alternative, a growing number of financial institutions offer
aggregators an “application programming interface” (API) to
transfer data from the financial institution to the aggregator. APIs provide
a contractual agreement between the aggregator and the financial institution—and
give consumers the ability to authorize access, limit scope, and specify
whether fund transfers are permitted.
Many customers appreciate having a single snapshot of multiple accounts.
But sharing security credentials for financial account information comes with
• Providing access to your personal financial information exposes
you to privacy and security risks, including potential vulnerability to cyberfraud, unauthorized transactions, and identity
• Many data aggregators are not subject to the same regulations that
registered financial institutions are subject to, particularly in areas of
data privacy and security.
• If the aggregator sells investment products, you might get sales
recommendations from that entity.
You can use these tips to help weigh the benefits of aggregation against
the risks of sharing your security credentials.
• When you authorize a third party to facilitate payments on your
behalf, make sure that payments are making it to the intended destination.
• Read the user agreement. Know what rights you are granting with
respect to accessing your financial accounts and using your data.
• Verify that the aggregator will access only the information it
needs to provide the desired services to you.
• Understand whether the aggregator has the authority to share your
security credentials, data, or access to your accounts with another service
provider, partner or affiliate.
• Ask about the cybersecurity policies in
place with the service provider and know what you can expect in the event of
a loss due to a data breach or unauthorized access.
Finally, do your own online research and due diligence. Look up any
reviews, complaints or lawsuits against the data aggregator you contemplate
To learn more about how to protect your money, visit the FINRA website at www.FINRA.org/LearnMore.
aggregation puts information about your financial holdings under one roof. To
learn more about this and other ways to protect your money, visit FINRA.org. http://bit.ly/2UQ2vGA”
On the Net:North American Precis Syndicate, Inc.(NAPSI)