Customer Autonomy and Pathways to Portability in Banking and Financial Services

November 3, 2019
Michael S. Barr, Abigail DeHart, Andrew Kang

One of the critical ways to promote economic security is by making financial services work better for more American families. Efforts to build a financial system that promotes consumer autonomy will involve innovation and reforms to our payment systems and more broadly, our policy and legal infrastructure. Such advances help empower consumers and harness technological innovation, but they also need to be grounded with strong consumer protections—especially in an era where people increasingly turn to technology to manage their financial lives. This white paper is designed to spark conversation among academics, private sector stakeholders, public interest organizations, legislators, policy-makers, and regulators about how to approach consumer financial data.

Consumer financial data is playing an increasingly important role in driving value creation in the financial services sector. Banks can now leverage advanced processing technologies to obtain new insights about client behavior to develop smarter projects. At the same time, data has fueled innovation by financial technology service providers (“FSPs”) that source data from banks. These service providers harness the data to create products and services that perform key consumer financial activities once handled entirely by banks and offer new experiences that banks themselves are often not delivering.

The authors would like to thank Omidyar Network for its financial support of this research. They would also like to thank several people for their thoughtful comments on earlier drafts of this paper, including: Kaitlin Asrow, Melissa Koide, Kabir Kumar, and Lauren Saunders.

Finally, the authors thank the research assistants of the University of Michigan Center on Finance, Law & Policy, especially Jennifer Chasseur, Aviv Halpern, Nicholas John, Guanjun (Samon) Sun and Wenqi (Michael) Xu.