Envestnet Yodlee is currently under investigation by the Federal Trade Commission for possible data protection deficiencies. In January, three Democratic lawmakers wrote to the FTC president asking him to investigate Envestnet Yodlee`s practice of selling anonymous client data to third parties such as hedge funds. When Wells Fargo announced Thursday that it had signed a data-sharing agreement with Envestnet Yodlee, it was an important step for the company. Ben Soccorsy, head of digital payments at Wells Fargo Virtual Channels, praised the agreement for its potential to strengthen customers through transparency and control. “If customers want to share their Wells Fargo banking information with an app supported by Plaid to help them better manage their finances, we want to enable them to do so in a transparent and safer way,” he said in a press release. This includes the ability for customers to enable or eliminate data sharing via the Control Tower. Data access agreements define the rules governing financial company API access, authentication, customer registration, and compliance with security, data protection, risk and compliance requirements. Ben Soccorsy, Head of Digital Payments for Wells Fargo Virtual Channels SAN FRANCISCO–(BUSINESS WIRE) —Wells Fargo – Company (NYSE: WFC) announced today that he has entered into a data-sharing agreement with Plaid, a leading data platform. This allows Wells Fargo customers to share their financial data in a more convenient and secure way with the digital instruments and services that Plaid supports through an Application Programming Interface (API). Many Wells Fargo customers access their financial data via Plaid to use apps that help them lead healthier financial lives. As a result of this agreement, Wells Fargo customers have more control over the banking information they share with Plaid-compatible applications, including the ability to enable or eliminate data sharing via Wells Fargo`s Control Tower SM digital experience. Control Tower is available in the banking app® Wells Fargo Mobile and online banking, and helps consumer and small business customers better manage their increasingly complex online financial life by offering a unique view of wells Fargo`s digital financial footprint. For its part, Envestnet Yodlee has signed data access agreements with several financial institutions, including Citigroup, JPMorgan Chase, Bank of America and Charles Schwab.
“None of the agreements are exactly the same, but they all agree with the most important principles: from screen scraping to an API, from the customer`s obligation to entrust their online banking information to us, to an Oauth base, diverted flows,” Brian Costello, vice president of data strategy at Envestnet Yodlee, told American Banker. These bilateral agreements ensure that there is a minimum standard of customer protection, which is absolutely fantastic for the industry. Oauth authentication uses tokens rather than password data to prove the identity between consumers and service providers. Customers will have more control, comfort and transparency if they share financial data with fintech pleading apps, Soccorsy declined to say whether Envestnet would pay Yodlee Wells Fargo to access the authorized data and said the bank could not disclose details of any of those agreements because the terms were confidential. Envestnet Yodlee also declined to comment on the terms of the agreement. With this agreement, Wells Fargo confirmed its intention to change 99% of the current screen of third-party financial applications to the exchange of API data.