RBC has announced partnership agreements with both Plaid and Envestnet | Yodlee as it looks to provide clients with better access, and control, and to allow them to securely share their financial data with applications outside of the bank.
These data access agreements will eliminate the need for RBC’s 14 million clients to share their banking logins and passwords with third party applications, creating a more secure and privacy-focused experience. With the new partnerships, RBC clients will also have access to over 7,000 combined fintech applications, providing them with a wide variety of additional tools to help them manage their finances.
Plaid is an application programming interface (API)-first company, and its data connectivity solutions help customers securely connect to the company’s network of over 6,000 fintech applications. With tools powered by Plaid, consumers can access various financial wellness applications.
“This data access agreement is a great example of the industry coming together to build new standards that create safer and more comprehensive financial solutions for Canadians,” said Peter Tilton, chief digital officer, Personal & Commercial Banking, at RBC. “While our clients want their primary banking relationship with RBC, they also want to be empowered with the ability to access, use and share their financial data with applications outside of the bank. As we deliver this added client value, it is more important than ever that we do so in a safe and secure manner. This agreement with Plaid does just that.”
Additionally, the Envestnet | Yodlee platform will help RBC clients better manage their finances and build wealth by connecting to and sharing their RBC financial information with more than 1,500 third-party applications.
“While a lot of our clients continue to choose to do their primary banking with RBC, clients also like to use third party applications, like apps, whether that’s for money management, budget or financial insights. We want to ensure that clients can continue to use these applications but use them in a safe manner, that is more secure and that protects the data and their privacy,” said Shekher Puri, vice president Digital Components and Platforms at RBC.
With the latest partnership, clients can now use fintech apps that use an API (a programmatic connection between computers or between computer programs), rather than screen scraping (the act of copying information that shows on a digital display so it can be used for another purpose), providing them with more control over their personal information.
“So the clients are actually more empowered to share the particular elements of data that they want to, and have the ability to modify onboard and revoke. They have that access and control and they have a much better user experience,” Puri said.
How it works
If a client downloads a fintech app that is powered by one of the data aggregators, they pick the financial institution that they want to share data with. Clients will then get redirected to their institution, where it would present the consent request and clients would provide their consent to allow the bank to share particular data elements.
Digital fraud is on the rise
Increasing security measures within financial institutions comes at the right time, as digital fraud remains an increasingly large threat to Canadians.
According to RBC’s 2022 Fraud Prevention Month Poll from February, 48 per cent of respondents say fraudsters have increasingly targeted them since the beginning of the pandemic, more than doubling compared to the 22 per cent of respondents in 2021.
And Canadians aren’t just feeling the increase in fraud attempts—the Canadian Anti-Fraud Centre has also reported that incidents of ID fraud targeting financial credentials nearly doubled between 2019 and 2020, from about 9,000 to more than 17,000, and final numbers for 2021 are expected to double again.
Additionally, the Centre reported that in 2021, there was C$379 million in reported losses from fraud, compared to C$160 million 2020. When it comes to financial losses, investment scams are at the top of the list.
“The occurrence of fraud has gone up more towards the digital side of things because fraudsters are realizing the clients are doing more and more things digitally…We’ve taken an abundance of measures to roll out various different industry leading digital security tools. We’ve done PIN on device, we do digital identity verification, we do two step verification. We have enhanced capabilities on fraud monitoring to make sure that clients can continue to safely bank with us,” Puri said.
He added that RBC ensures that when it comes to third party platforms, all participants in data sharing need to meet minimum thresholds from a security and safety perspective.
“Clients need to know that the fintechs they are sharing their data with are meeting some level of these minimum security standards so they can feel safe. If I’m interacting with this app and I’m sharing my data with this app, it’s going to be protected,” he said.