Origin Bank in Ruston, La., has begun deploying software that decodes raw transaction data and ultimately could enable it to show customers all the apps that are receiving information about their accounts — as well as let them turn that data flow off or back on.
Those tools could give executives at the $6.6 billion-asset bank insights into all the places its customers’ account data goes, which in turn could lead to ideas for service enhancements or new products.
In letting customers see which companies are using their transaction data, Origin Bank would be following in the footsteps of larger banks like Wells Fargo, whose Control Tower app lets customers see where their account data and recurring payments are going and make changes. Bank of America recently created a similar capability in its mobile banking app.
Moreover, in uncovering all the screen scraping and data sharing linked to their customers, Origin would be gaining a level of transparency few other banks have.
Such features are bound to become more common and may eventually become table stakes for all banks, as the prolific use of bank account data by fintechs continues and consumers inevitably become disillusioned with some of the services they receive.
“We were seeing this huge growing emphasis on consumer data rights, specifically in our need to put the power back in those hands of the customer, by enabling them to securely use third-party financial products or services that rely on getting access to their bank account data,” said Corey LeBlanc, chief digital and innovation officer at Origin Bank. “But as banks, we've always held on to the transactional account data from our customers from a security perspective and a competitive perspective. The benefits of opening these data collections and sharing them to third parties for the benefit of those customers is obvious, but the control just has to be there.”
Origin Bank began partnering with MX, a data aggregator and financial technology company in Lehi, Utah, in 2017, when the bank’s CEO, Lance Hall, became unhappy with its existing personal financial management software.
“He called it a spreadsheet inside our app and couldn’t stand the thing,” LeBlanc said.
Hall had seen MX demonstrate some of its tools at a conference and asked LeBlanc’s team to look into it.
“At the time I wasn't really excited because we all have seen PFM not have a tremendous amount of success,” LeBlanc said. “You look at probably 8% to 15% adoption, it's not something to get overly excited about.”
He met with MX’s chief technology officer Brandon Dewitt and CEO Ryan Caldwell and became convinced their team was committed to using data to create a better understanding of the way people manage their finances.
“I was superfascinated because I've been a data nerd for more than 20 years and that stuck with me," LeBlanc said. "Everything that they were putting into their development of tools and products had a focus on underserved needs or on creating new value for the customer, whether that be for the bank or for the end user interacting with their finances. A lot of people preach that, but you can tell pretty quickly, based on conversations and contract negotiations, that that's not the case.”
It so happened that around that time, mid-2017, Origin Bank’s core banking software provider, FIS, had come to an agreement with MX to embed its personal tools in FIS’s online and mobile banking software. Origin Bank rolled out the MX PFM software from its FIS core in July 2018. It also began using MX’s account aggregation and transaction categorization technology for the PFM program.
At first, adoption hovered around 3%, LeBlanc said.
“We did a couple of campaigns to engage our customers, and right now we have about 10% adoption of the PFM tools, which is not super high, but it's not low compared to what we would expect,” he said.
LeBlanc and the team were interested in making the MX software the entire experience of online and mobile banking, so that every customer could use them without having to work at it.
“We're still trying to figure out how we're going to do that effectively, securely and efficiently,” he said.
Origin Bank also began working with MX this year on categorizing, scrubbing and better structuring customer transaction data throughout the bank.
“We have 10% of customers who sit in this system that goes through the MX cleansing and structuring process and categorization,” LeBlanc said. “How do you make that 100% of our consumers, not to necessarily build a targeted marketing platform, but to better understand the underserved needs of our customers?”
That data could help the bank understand what products and services customers are using from the bank, and which they are going to others for, because the bank doesn’t offer them or there’s some feature they like from a competitor.
“We can start to better strategize our digital initiatives to actual customer needs and focus,” LeBlanc said.
A better understanding of what customers are doing and want “is much more important as we start to make decisions in a very unpredictable world,” he said. “How do you predict what customers need? What products should I invest money in? Should I invest money into a digital investment service inside of my mobile app? Well, if a tremendous amount of our customers’ data indicates that that's important, too, and they're having to go to someone else because we don't offer it. That's something that would carry tremendous weight.”
Origin Bank is considering using the MX Portal, software that MX launched in September that lets customers grant, manage and revoke access to their bank account data at any time. It uses Financial Data Exchange 4.1 specifications for access control and security.
“The portal provides something that I think is really important, and that is customer data control and data privacy,” LeBlanc said.
The customer-facing portion of the portal lets customers control who has access to their data. Wells Fargo offers this in an app called Control Tower, and Bank of America has built a similar feature into its mobile banking app.
Another facet of the portal is an enterprise-level dashboard that will help the bank understand who is accessing its customer's data, and perhaps structure some partnerships with some data aggregators, fintechs or financial institutions to give them a better version of data, if it's mutually beneficial and the customer has a need for it, LeBlanc said.
If the bank saw that 15% of customers were using Plaid’s data aggregation service, the bank might decide to forge a partnership with the company, for instance.
MX will also provide support for the customer consent agreement, which LeBlanc sees as critical as the industry moves toward open banking.
“Now that we’re sharing data, it's about trying to structure and formalize a process to share data securely,” he said. “The user is going to have this consent control center, where they have visibility and control over not only just the connections that they've created, but any applications or anything else that they've connected to the data.”
Customers will be able to look at every place their data is being used and check the services they still want to use and uncheck the ones they don't.
“When we start talking about open banking and consumer data rights in general, this is the right step forward,” LeBlanc said.
And having MX do the plumbing work required, “helps the financial institution like mine, which doesn't have the internal resources or engineering teams to go build something substantial and get it out quickly, but allows us to solve for this consumer demand for access to data, but then also solve for the risk mitigation.”
LeBlanc hopes to evaluate the MX tools over the next couple of months and make a determination by the end of the year on an estimated rollout time.
MX Portal is part of a suite of products MX launched in early September, called MX Open, to support open banking. Other products in the suite help banks create and use application programming interfaces to share data with fintechs directly and avert screen scraping.
“One of the reasons we launched Portal is as one leg of a three-legged stool under MX around platform and policy, as well as the idea of connectivity for the customer benefit and for the bank’s benefit,” said Jane Barratt, chief advocacy officer at MX. One of the biggest challenges for financial institutions is to be able to get visibility and then be able to do something with it, she said.
“You shouldn't need to be a megabank in order to experience the benefits as an institution, as well as your customers,” Barratt said. “This really should be something that from an infrastructure level and a strategy level should be available to the whole ecosystem.”
