Video: Open Banking 2.0: Leveraging Data to Empower Underserved Populations

Online Event Archive Recorded: May 20, 2025

We examine how the latest advancements in open banking can be harnessed to address the needs of underserved populations. Panelists delve into practical strategies for leveraging financial data to improve access to financial services, enhance financial literacy, and promote equitable economic opportunities. Gain tips for navigating regulatory challenges and continue ensuring the benefits of open banking extend to all. Open Banking 2.0 should not only further drive responsible innovation but foster financial inclusion and support those who need it most.

Speakers:

Erin Borg, Associate Director, Inclusive Financial System, Financial Security Program, The Aspen Institute

Nat Hoopes, Vice President, Head of Public Policy and Regulatory Affairs, Upstart

Ashley Knight, Director of Product Management, Consumer, Experian

Tom Carpenter, SVP, Open Banking & Policy Engagement, Mastercard

Ian P. Moloney, Senior Vice President, Head of Policy and Regulatory Affairs, American Fintech Council (Moderator)

Jacelyn Matthews, Director, National Training Academy, NCRC

Transcript:

NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.

Matthews 0:02
Okay, so welcome everyone. Thank you so much for joining us in this discussion this afternoon. This is Just Economy Conversations: Open Banking 2.0: Leveraging Data to Empower Underserved Populations. My name is Jacelyn Matthews. I’m the director of the National Training Academy here at NCRC, where our mission is to make a just economy a national priority and a local reality. I’m really excited to have this panel discussion today. Some of you may know, but if you don’t know, Just Economy Conversations was actually birthed out of the idea that many people come to our national conference in DC every year, but a lot of people either can’t make it for different reasons – or there’s some great conversations that are starting during the conference – we want to make sure that we’re able to bring to a more national scale. So that’s why we try to have these after our conference, just to continue that conversation, hear from the people who are doing the work directly, so that you can ask your questions and hear their takeaways on how you can actually get this thing worked out and started within your local communities. So with that being said, I’m going to pass it over to Ian Moloney, who’s a senior vice president of and head of policy and regulatory affairs at American FinTech council to introduce our panel, Ian, I’ll pass it to you.

Moloney 1:25
Thank you. Yeah, and we’re so happy to be working with NCRC on this panel, because open banking is such a timely topic. It’s really been, you know, kind of eight and 12 years, depending on how you look at it in the making. So now we’re finally at a stage where I think, you know, consumers are really going to see a difference, and we’ll be discussing all of those things in real detail in today’s webinar. So just to, just to kind of get things started, though, you know, I think it’s important to think about what is open banking. While there’s no strict definition, I think there’s a few points that are worth kind of driving home, specifically around, you know, consumer banking, and this is really consumer driven banking, and open banking is really the system where consumers can share their financial data, and by proxy, you know, really be able to move their feet and their their economics to different products and services, particularly within innovative spaces like financial technology. So naturally, American FinTech Council is interested in this topic, and the folks that you’ll hear from are doing some really powerful work to not only impact sort of the business side, but specifically, I think, the consumers and those that have been historically underserved. So without further ado, I think it’s good to introduce our panelists first. So first up we have Erin Borg, who is an associate director for inclusive financial systems in the financial security program at the Aspen Institute. Next up we have Nat Hoopes, who is vice president, head of public policy and regulatory affairs at Upstart. Then we have Ashley Knight, SVP of product management in the consumer space at Experian. And last but certainly not least, we have Tom Carpenter, who’s a senior vice president of industry, policy and standards engagement open banking and open finance at MasterCard. Quite a mouthful, but, but a well deserved title, and a really great group overall. So I think just to kind of build on, on the initial points that I was making, you know, and have some kind of setting of the stage and foundational concepts, it’d be interesting to hear from you all, given your various backgrounds, kind of what you think of when you around the space of terms like open banking, open finance and open data, and then specifically issues like transaction data, cash flow, underwriting and consent and how they matter in the context of open banking and financial inclusion. So maybe I’ll kick it to Tom first to kick us off.

Carpenter 4:05
Yeah, thanks Ian, and thanks to NCRC for hosting this webinar. It is timely, and I think you know what’s interesting – I’ll just start from the standpoint of saying I don’t have been working in policy and regulations for 20 years, 25 years, almost – I don’t remember another issue where you’ve seen the combination of kind of complex policy issues around financial inclusion dovetailing so well with market innovations that are happening to actually answer those problems. And so it’s a really exciting topic to dive in. And yet, you know, I think for anybody that works in this space, we all have to have a 32nd elevator speech that we have to explain to our uncle or our parents, like, what is it that you actually do? And so for us at MasterCard, you know, whether you’re talking about open banking, open finance, open data, consumer-driven banking, connected finance. There’s way too many words, but they all basically build on the exact same bedrock principle. And the principle is that a consumer or a small business, they are the owner of their of their data. They have sole discretion in how it’s used, who gets it, who it’s shared with, and who benefits from it, and whether you’re talking about kind of a narrow scope with just banking data, transactions and the like, whether you’re talking about broader open finance, so insurance, investments, tax, any other financial data, or if you’re including broad or open data, things like telecom data or energy data or healthcare data, that principle is the same, you as the consumer or the small business owner are the one who gets to utilize this data in the way that large companies have been doing for a really long time. It’s just that we are now technologically able to give consumers access to usable data in a way they haven’t had before, and really utilize that for their own financial benefit. So that’s kind of the 32nd version of how I think about all these terms and but excited for the discussion today.

Moloney 6:11
I love that. Those 30 seconds, I think we’re well suited. And Ashley, I don’t know if you have anything to add on that front?

Knight 6:17
Yeah, I mean, those are, those are great points in a solid description. I always think of it too. How would I explain this to to my kids? When they say, what do you what are you doing, and where are you traveling to, and what are you talking about? And I try to make it super simple, and I always think about it’s, it’s the consumer that is granting permission to their bank account information, really, and it’s pretty simple, but it can be used in different ways. And at Experian, which is where I’m from, we use a lot of the terminology, like like cash flow data, which is essentially the the bank transaction information that shows the inflows and outflows of data. We also talk about categorization, which is how you categorize the data that comes through open banking. And so I think these are important points and terminology to ground on as we have this discussion, because we’ll often be using this language interchangeably, transaction data, cash flow data, etc, throughout, throughout the discussion

Moloney 7:21
That’s wonderfully helpful. And I think the principles that Tom laid out, and some of the terminology and usage of vocabulary, I mean, it’s all important. But essentially, what we’re getting at is, you know, consumers have the right and the ability to move with their feet and move their data. Nat or Erin, I didn’t know if you had any other any other points on kind of setting the stage, but I definitely wanted to provide you a minute to do so.

Hoopes 7:45
Well, thanks, Ian, and this is a really timely topic. I will set the stage in the sense that I was working on Capitol Hill in financial services policy, first for Senator Joe Lieberman Connecticut, and then for Senator Scott Brown of Massachusetts during the development of Dodd Frank. And this concept was, was that Tom referenced that the customer, the consumer, owns their own data. They have the control of their own data. Is really a bedrock in federal law. And so, you know, we’ve saw first initiated on the first Trump administration, and then and then finalized under the Biden administration, you know, a real effort to put a lot of detail on what does that actually mean. And I think a lot of bipartisan work was done and has been done on that topic. And I think even if, if it is revisited, we obviously would love for that to be settled, but even if it is revisited, I think that core, you know, absent further action from Congress, that core concept means that efforts to put roadblocks or to put costs or to add fees, I think, are going to be met in the courts with a rejection, because ultimately, if a customer says, I think I can get a better loan, or I think I can get a better account, or I can get a better and I’m willing to share my information to in order to get a lower price loan, I think efforts to restrict the flow of that information, or efforts to charge costs that would then bounce back, and obviously would then, you know, hit the customer itself that is going to end up being met with failure in the courts because of what that federal law, you know, states. And it’s now obviously 15 years past. Dodd Frank, I’m aging myself, how did that happen? But that is the key. I think that is the key core principle is that is that, is that that point, that Tom articulated at the beginning, that this is, you know, firmly enshrined in federal law, and a really core point. And then I think the only other thing I would add is that that framework has empowered customers. It has empowered them not to be stuck with whatever the products or offerings of their financial institution, their primary financial institution. It has really enabled them to go out there and take advantage of this incredible capitalist system and choice that emerges when people can compete with a really simple bedrock principle like the one Tom articulated. And so we’ve just seen this explosion of services, so many of them, saving customers so much money, getting customers new opportunities to invest, to save, to access credit. And that is, I think, the core value proposition of this entire conversation on open banking,

Moloney 10:42
That is absolutely true. And I think we’ll be getting deeper into those weeds in the coming, you know, minutes and in the next hour or so. But Erin, I just wanted to see if you had any anything you wanted to add to what’s already been a great conversation.

Borg 10:56
Yeah, I’ll be quick, but just to echo some of the things that both Ashley and Tom shared. I’m way less in the weeds on technical vocabulary, and we’ll parrot my colleague Ida Rademacher, who often says, in the context of our financial inclusion work, I don’t care if you call it the broccoli strategy, the terminology is less important, unless you’re a regulator, than what it can actually deliver for households and for our financial system. So nothing more technical to add, other than excited to get into the conversation.

Moloney 11:33
No, and I think that’s great, and really hits you know, exactly at the core that we’ve all been touching on, which is, let’s talk about the consumers. Let’s talk about the products and services. And so, you know, just a reminder to those folks that are in attendance, please feel free to use the Q A function if you have any questions, and we’ll be, you know, able to facilitate that. That’s part of the discussion more towards the end. But, you know, I’ve got my questions ready. So without further ado, I guess we’ll talk first, Ashley, if you wouldn’t mind, and Nat and Tom, this is also definitely a question for you more on the implementation side, but one of the key areas we’re focused on today is understanding those challenges and barriers that we alluded to just a couple of minutes ago around financial access and that really many consumers still face, you know, whether it’s lack of credit history, high costs, you know, limited access to financial services, these are really the obstacles that are preventing individuals, especially those in underserved communities, from engaging fully in the financial services industry and having that financial stability that I Know, you know we all seek. So it would be interesting to kind of see how you know the open banking system and the work you’re doing at your various organizations is impacting consumers, and specifically those underserved consumers, and maybe give some real world examples on your solutions and how they’re making a difference. So I know a long-winded question, but Ashley, I you know, I’m happy to repeat, but feel free to take it away.

Knight 13:05
Yeah, no, I think that’s a great question. And to make it super tangible, I’ll give two examples of how open banking has helped to serve the underserved. So one is at Experian, we have a service called Experian Boost, which leverages open banking technology. And so what Experian Boost does is allows the consumer to permission access to their bank account information for the purposes of boosting their credit. We launched this probably about six years ago now, and what it does is allow the consumer to provide positive payment history on telco payments or utility and rent, and this has allowed them to boost their credit. Since we launched the service, we have added 40 million plus trade lines to the credit database at Experian. And so when you think about the number of those that have consumers that maybe have what we call thin file which is very limited credit history, or no file which is no credit history, this boost service has been hugely impactful for those to create a credit background as well as grow, grow existing. So that’s one real, tangible example of how open banking has really transformed what we can do from a credit ecosystem perspective. The second way I’ll mention, which is more new, new to the industry, which is leveraging bank transaction data, and I’ll call it cash flow that’s our terminology here, to start looking at a consumer’s holistic financial help. So not just the credit data, though, credit data is hugely important in terms of assessing risk, but also pulling in the other side of a consumer’s financial profile so that those that may be ineligible for credit based on a lower credit score or because they don’t have a lot of credit data, what lenders are starting to do now is they’re looking at how they can reverse declinations or approve more consumers by leveraging open banking data in addition to credit data. So it’s really transforming how the industry is viewing credit and also just decisioning and how they service their consumers, and ultimately, with the goal to drive greater financial inclusion. This has always been part of our mission, to drive greater financial access. And so, starting with the boost capabilities and helping consumers there, and then translating that over on, you know, the lender side to help drive greater financial inclusion as well.

Moloney 15:51
That’s, that’s great. And I know that, you know, alternative data, as it’s been termed, has been, you know, something that that’s really been helpful to underserved communities specifically, because they’re just not they don’t have those data points readily available that are, you know, more of the traditional data points. So Tom I’d love to hear kind of over on the MasterCard side, what’s, what’s keeping you busy on the real-world examples of, you know, making meaningful differences for consumers on open banking.

Carpenter 16:18
Yeah. Thanks. Ian. So Ashley did a great job explaining we work closely with Experian in terms of helping kind of provide and create the connectivity so that that consumer data can flow easily to a product or service like Experian Boost. And so we kind of operate as the intermediary partner, the pipes, if you will, and the infrastructure that one provides kind of data access, but then also ensures that that data access is secure, and that, you know, where fraud exists in open banking or in credit cards or somewhere else, that we kind of have a holistic protective layer that goes over that for consumers. I’ll say, you know, one of the things I forgot to mention at the outset that I think is important, especially for anybody in the audience who’s already glazing over at the buzzwords, is, I think that for the most part, this will just be known as banking. This will just be known as financial services in not too many years, because the expectations of consumers will be that, oh, I can do things faster. I can share data to help me do kind of the boring stuff, like account opening and processes that are just much cleaner and easier. Or I can do the really cool stuff, where I use products and services so that I don’t have to do a lot of legwork to understand, like my entire financial health, as Ashley was saying. And so I think it’s important to focus, if you’re a practitioner in the space, you’re working with consumers, you’re working with small business on kind of the the overall understanding and hygiene around like, is it safe to share my data? How do I think about the parameters of how I should evaluate a product or service that might ask me to share my data for something and to think about it more around that, that term, rather than like, do I know what it’s called at this moment, and do I separate it from the rest. In terms of kind of the practical side? We see a couple of just really enormous benefits. One, I think this technology is increasing financial literacy, like, more than anything else combined. And it’s, it’s a show and tell kind of model. Like if I can see and feel, even if I don’t believe that I’m like a super savvy finance person, or that I’ve really got my arms around, or that I don’t spend wisely enough, or whatever. It’s extraordinarily hard to really understand that. You may just have a sinking feeling of I think I’m spending more than I should be. But the tools that have been available to really understand is that a feeling, or is that a truth, are really coming, coming into the foray. So I think that open banking is just giving kind of that overall picture and the tools to manage finances and to understand, like, where you do need to be more careful, or where you can manage finances better in a very unique way. In terms of credit access, I think that is definitely the, probably the, the number one story to tell. I mean, you just think about kind of one in five consumers do not have a functional credit score in some way, shape or form. You’ve got 33 million small businesses across the US, the smallest of which kind of credit access or access to capital is often the number one issue that gets raised. And so you are allowing a technology to kind of give lenders a view into a consumer. That’s not just, did I meet them in my office, and do they seem like a good person, or, you know, somebody else kind of vouching for them in my business network. But I can actually, like, understand and see, you know, how many times have they overdrawn their account? Are they kind of generally, you know, using less money that they’re taking in every month, and so all those factors where you’ve got a lot of consumers and small businesses that actually are very responsible, they just may not be playing in the standard kind of credit building ways and so they’ve been invisible to the ecosystem broadly. And so this really gives alternate paths to be understood, and it also does so in a safe way. I mean, I think again, I come back to like policymaker solutions are usually trying to trade like a social value or a social good, and try to limit the unintended consequences or the distortion of markets. All this technology is doing is saying, well, this just allows us to better know a consumer or small business, and that ultimate lending decision is still kind of up to us, and so we’re not distorting markets. We’re simply just allowing consumers to really be known and utilized by their data. I could go on and on, but I think those are kind of two of the really key areas where we’re seeing just extraordinary practical benefits.

Hoopes 21:10
And I’ll just make that real. So Upstart, for those of you who don’t know, we’ve partnered with, you know, more than 100 banks, credit unions, CDFIs, minority depository institutions to help them find customers, and also, then, you know, underwrite those customers and provide access at the best possible price. And so if you think about the core customer, you have someone who is maybe burdened by credit card debt, and the rate on their credit card wasn’t as precisely underwritten. Maybe it was, you know, they looked very risky because of their prior credit history or limited credit history. But by pulling in data through open banking, Upstart, one of Upstart’s partners can say, aha, I see that you have a steady paycheck through the you know, you’re a nurse in the Houston hospital system. Maybe you your reason your credit score was low and your credit card rate was very high was because you just simply didn’t have a lot of credit history. You know, again, credit scores are are useful and accurate, but they’re more backward looking at, you know, what have you done with credit in the past? And open banking is enable Upstart to support lending partners and saying, hey, this person actually, we can get right in there and see, like, what does their financial life look like today? Like, what is their actual in and out, and what is driving that? And then potentially layering on information that the customer would provide, like, I have a nursing degree, and then you can look at what is the projection of their income based on that degree. And then that enables, you know, an enormous amount of more precise underwriting. So then the person that might have had a rate of 26.9 on their credit card might get offered up a personal loan at 16% APR, and then they’re saving enormous, you know, amount every month they’re freeing up the room on their card. So then they have the financial flexibility, and they have a single payment at a lower APR. All of that is only possible if the access to the data, the actual data, whether it’s sitting with you know, there are many providers, but everyone on this call should know Plaid or Prism. You know, there’s been an enormous amount of effort, the joint effort between banks and some of these data aggregators to work in a way that is safe, with APIs and so forth. But if the access to that data is somehow restricted, or if it’s if it all of a sudden, it costs a lot to access it, well then all those customers that have a chance to get a better product, a much lower APR product, all of a sudden could be left, kind of stuck where they are. And so I think that, I hope that kind of helps provide, there’s a really incredible added dimension, and Experian boost is a great example of that. All of a sudden. Now, data that wasn’t, you know, in the file, right previously, now, all of a sudden, data that’s relevant to somebody’s current cash flow in and out. Here’s what you know their utility bill was, is now being incorporated, and then that empowers more accurate and ultimately than more inclusive credit systems. So one quick stat, I would say, layering on we have seen that layering on these alternative types of cash flow variables and other variables probably improves by 30 to 50% the approved Prop, you know, the population that you can actually approve for credit. So 30 to 50% more people that would have been stuck with a no, you’re not eligible for credit before the addition of this data, and then at rates that are potentially 25 to 50% better. To lower aprs. Right? Better data equals more approvals, lower aprs.

Knight 24:45
I mean, I think that’s like the headline right of all of this, we could just, we could just stop now and just use that quote. I mean, you can approve more consumers. Consumers can get better access to credit at a more affordable pricing. That’s that’s significant. That’s really the headline. I think what open banking opens up is what you just perfectly described, is hugely material to the consumer and the overall ecosystem.

Moloney 25:14
No, I totally agree, and it really is, you know, I think whether it’s, you know, defining underserved consumers as maybe those that don’t have bank accounts, or, you know, have been maybe using alternative financial products like payday loans and things like that. You know, there’s, there’s those sort of consumers. There’s also consumers that are, like we’ve been discussing the thin file or the no file that you know maybe don’t have their their credit histories really even known to themselves or others. And so, you know, I think taking a broad approach of of, you know, an underserved consumer is really whatever you know, folks want to kind of define it as, because there’s, there’s a lot of different ways to slice it open. Banking can really help, you know, improve that access and So Erin, I know, given your unique advantage over at Aspen Institute’s financial security program, what if any impacts have you sort of seen from open banking related to helping consumers live a more financially secure life, and also, what types of industry activities would you like to see more of to help this effort?

Borg 26:22
Yeah. So what you’re really asking is, why does Aspen care about open banking? We’re not a lender, we’re not a financial services provider, but what we do think a lot about is household financial security, and we’ve heard so more affordable credit, and more people getting approved for access to credit. So sticking with that credit use case of open banking, which, as Tom said, I think, is really a useful story here, when we think about our goal at financial security program of 10x ing, the wealth in the bottom 50% of the wealth distribution. How do we get there? How do we actually help people build wealth and build long-term financial security? Yes, people need to be able to invest in assets, and those assets need to be affordable and available. But we need two other things, which is financial stability and financial resilience, so households need routinely positive cash flow, and there’s a whole network and world of supports around public benefits and increasing income that open banking is not really designed to solve for. But one of I think the under, undersold upsides of open banking when it comes to credit access is thinking about that financial resilience piece. So we know that open banking can have huge impacts in thinking about our big asset purchases, like buying a house, financing a car, that can help you get access to better income opportunities. But open banking, I think, can really drive opportunity in shorter term, smaller credit options, where until now, the cost to underwrite has been really high and the access to consumers has been low. And so I think having cash flow data, looking at ins and outflows of households are really, really an exciting opportunity for open banking. I’m in DC right now, but my hometown of St Louis just experienced some pretty terrible storms last weekend, so there is a whole community of households and small business owners that have some unexpected expenses, whether it’s paying for some damage to a building, to your house, to your business being shut down and loss of revenue. And I think that the combination of cash flow underwriting and being able to very quickly underwrite small dollar loans, whether it’s a $500 small dollar loan, or whether it’s access to putting something on a credit card that you can pay off over time, I think is really potentially game changing, and that’s why we’re really excited to see. Because households, they need both right people need to be able to manage these short term shocks or expenses alongside saving and building wealth, whether it’s in retirement or home ownership. We households need all of it at once, and I think that the closer to real-time access, the ability to ingest these data sets at scale from the provider side, is really exciting. And I couldn’t agree more with you, Tom, when you said that this is just going to be the wave of the future, and this is hopefully what consumers should demand and expect. They’ve got a lot of rich information about what money is going in and out of their households, and so we’re really excited about some of the technology that enables this to be done faster, better, cheaper and more securely. That really lets consumers hold the pen on who gets what data.

Moloney 30:21
That’s great. And I think it, it’s so important to, really, you know, again, keeping the consumers in mind and letting them be the ones to make the choices about what their financial futures look like and what the what the products and services that they’re engaged with will be. And, you know, it kind of brings me to, you know, the next part of our discussion. I know we’ve talked a bit about, you know, topics like financial literacy, enabling better pricing, addressing, you know, some consent issues and in ways that can can truly serve, you know, these consumers. But I want to drill down so, so if you’ll all bear with me, I I think, you know, staying kind of with Erin first on financial literacy, it would be helpful to first hear your perspectives, and then maybe go around the horn on, you know, how have you seen financial literacy improve through the use of open banking tools and services? And you know, are there any gaps? What? What kind of needs to be done more from a financial product standpoint? But also, you know, how can, how can consumers, you know, have the confidence and the understanding that they’re using these tools effectively?

Borg 31:27
Yeah, when I think about financial literacy, I think it’s a really important floor and not a ceiling. It’s part of that necessary, but not sufficient set of of things and education and information that people need. And right now, if you asked me, before open banking, to write a budget, to set some financial goals, it’s really hard to do that effectively in isolation, and it’s even harder to do that without access to what your full financial picture looks like. So I’m can’t remember whose study this is, but something like the average person now has financial accounts in six different places. It’s a combination of banks, credit unions, fintechs. People have money hanging out in peer-to-peer payment platforms. People have money all over the place, and there hasn’t really been a useful infrastructure to be able to put that all in one place, and, more importantly, to put that into the hands of consumers. And so I think being able to access your data and to be able to build that holistic picture, I think, is really step one in being able to deliver, whether it’s financial literacy, education capability or financial coaching that actually aligns with people’s lived experience, to be able to make use of some really exciting tools around personalization and customization that open finance can enable. But yeah, all all that to say, it’s really about, how do you make financial planning more accessible to more people? How do you get high quality advice and tools into the hands of more people, and how do you do it at scale? And I think open banking can go a long way in in building some of that wrap around infrastructure.

Moloney 33:26
Absolutely. And I think, you know, Ashley over at Experian, you know, as far as building holistic pictures, you know that that that must resonate with you. And so from a financial literacy standpoint, you know, it would be helpful to kind of get your perspectives on on the tools and services and where are the gaps, and anything like that.

Knight 33:46
Yeah, I mean, I mean, I mentioned boost earlier, which obviously has been a key tool to help consumers better understand how to improve their credit, and just gaining literacy around what having credit means and the power and access it gives you as you start to build up your credit. But I also think open banking makes it easy for the consumer to understand how their their spending, what their habits are, where they can potentially overspend, so leveraging personal financial management tools to be able to do that to help improve a consumer’s financial situation, can help drive greater literacy as well. And I think the key to that too is making it super easy to understand and seamless to use, so that accounts can easily be connected, data can be easily enriched and synthesized to be able to understand. So I sort of think about it like if I were to to have my mom sort of log in and try to start doing open banking and connecting her accounts to a to a PFM tool. It needs to be very simple and easy to understand and give her the very clear insights into what she may need to do differently, or how she could save more, etc. But open banking enables all of that, and can help drive overall literacy around how to how to save and how to spend wisely, as well as build credit.

Moloney 35:19
Absolutely and essentially, it’s, you know, it’s that user interface that I know, I’ve thought is so important, you know, I think about, you know, things that are, you know, whether it be like, you know, from a research perspective, trying to develop APIs and stuff like that, or anything like that, you want something that has a really good user interface. And so that’s how you have consumers kind of have that uptake. And, you know, Tom or Nat, I don’t know if you have anything else to add on the financial literacy front, but I want to give you the space to do so.

Carpenter 35:53
I would just say, you know, when I think about open banking, I grew up with a with a dad who like financial literacy was like he pounded it into me. He was a he was a banker. And so I have all these like mantras in my head that he gave me where he was kind of always tapping me on the shoulder as a kid or even as a young adult, like, Hey, you don’t need to spend money on that or don’t spend money on that thing, spend money on this thing. And I kind of took that for granted, and I didn’t realize the fact that everybody didn’t grow up with those circumstances where kind of financial literacy, the value of $1 wise spending, was like a key part of parenting, even among a lot of my friends. And so I think about open banking in a way that allows everybody to kind of level that playing field. I mean, I’ve seen some apps even that are almost like your accountability friend, where you give it access to your transactions, and you go spend a little bit too much money at a clothing store, and it kind of gives you a notification like, hey, this you’re $300 over your goal that you set for clothing expenses, or just a reminder, you know, we see that you are at Panera once again, or at Starbucks yet again this morning, and so kind of giving you that accountability partner, or allowing in real term to kind of level that playing field, no matter what you grew up with, no matter what examples were put in place, that kind of teaches you that financial management and so I just think about financial literacy as not only knowing, like, what things mean and what products and services, but really kind of understanding your own behaviors and your own proclivities and being able to see those in real time and how they impact you. Like, oh, because I overspend, I get charged more, or because I don’t manage money correctly, I have trouble getting loans at good terms, like all those things kind of factor in. And so I feel like there’s a lot of different products and services and innovation that is developed around kind of ways that you can educate consumers about, not just the topics, but their own behaviors in the space

Hoopes 38:04
Tom RIP, RIP, you will rip that Starbucks from my cold, dead hands. Sorry, no, and I have just a thought, and I see you posted in the chat that’s sort of really relevant for this conversation, but the concept of an underserved consumer, and I think just the stat in the credit space to get people thinking a little bit that our company was really founded on, was just this idea that roughly 84% of Americans have never defaulted on any kind of a financial obligation, and yet only roughly 50% are considered prime, right? And by prime, it means they can sort of access a very mainstream product that you know would be comparable, relatively comparable, in rates or terms that you know, somebody who’s relatively well off in the country would would have, you know, and so from that perspective, if you think about that, you know, underserved, obviously, there are people that have trashed their own credit with multiple bankruptcies, or they had total disasters happen to them. That’s a little different than an underserved customer, who’s somebody who is sort of blameless in credit and who has, you know, a great potential picture to repay an obligation and access a lower price product. But yet, for some reason, they are not seen that way under traditional metrics, and that’s a great opportunity in open banking. But it’s also it’s a really an important education piece to make sure that those people are actually getting the outreach like they’re actually seeing credit offers from mainstream prime offers. And so one of the sort of practices that that we think by applying alternative data and AI to this problem of credit, it means that when our partners and we’re helping them with like direct mail pieces out, I know everybody hates getting mail in their mailbox, but you know, it’s important that those pieces of mail don’t just go to people with over 700 credit scores, right? If people who have seven. Credit scores, the only ones. 80% of black Americans have a credit score under 700. Doesn’t mean that they shouldn’t see an offer. And so it’s really important that outreach be inclusive to all of the population who can, in theory, benefit from the product and who have the ability to repay a product, not just what is the traditional sort of three-digit credit score system think of as somebody who should receive an offer and so, or an initial marketing outreach. And so, I think that that that is a piece of financial education and financial literacy is just simply like, how much outreach, how much marketing are financial institutions doing to those people who can, can repay and benefit from this product?

Moloney 40:49
That makes, that makes a lot of sense. And really, you know, it does bring it back to not just, you know, incumbent upon the consumer or what, what is the consumer doing, but also, you know, what is the business doing and, and, you know, Tom, I think your FinTech or open banking ‘accountabil-a-buddy’, you know, point is, is very well taken that you know you really have to know yourself in order to budget effectively. And, and sometimes it’s, you know, it’s hard in the moment. So, you know, we all suffer from, from the issues of, you know, impulse control and whatnot. So, so having, you know, sort of a bot to tell you, like, hey, maybe don’t do that, I think, is really important. But, you know, going back to Nat to your points around, sort of the better pricing that can be gained from leveraging that data, let’s, you know, put it in more concrete terms, or kind of go a step further, if you wouldn’t mind around, you know, things like the cash flow underwriting that we’ve discussed quite a bit, but also, you know, consent-based data sharing, opt in models. You know, how are those sort of helping with that access to fair pricing? And I know Upstart has been doing a lot of work in all of those spaces, so I’d love to hear your perspectives.

Hoopes 41:59
Yeah, well, I think we have talked a lot about the ability of cash flow or account data, you know, again, permission by the consumer, or other alternative data when, again, it’s right there, the customer is the one who’s directly providing you the information, and then all you’re doing is verifying that, that they’re not, you know, saying that, you know, they make $200,000 a year, and really they make 20, right? You know, there’s so there’s a verification piece that has to be done when it’s customer provided information, but the customer is providing this data, the either the cash flow or bank account information or the alternative data, purely for the reasons of trying to get a better, you know, access to get approved, try to get a better price. There’s also, as you mentioned, opt-in. I think there’s a whole conversation that is important around some of the utility data that Ashley mentioned earlier. You know, in general, there’s questions about whether should, should providing, you know, or rental report data reporting, which is a really important piece. People are paying rent on time every month. They should be getting credit for it. And in my view, those in general should be opt-out. So if somebody, for some reason, doesn’t want to get you know, provide that information like they can do that, they shouldn’t have to provide it to the system, to the system, but rather than opt-in. Because what I fear is that there’s a lot of people that would miss an opportunity to to start to build the credit for all these payments that are getting made for utilities or cell phones or or rent. And then, therefore, they’re the traditional unit, when I say traditional, but like the the credit file or the credit score, or, you know, is not able to be boosted in any way with any of these payments. And so that question of of you know, of course, everybody should have the opportunity to opt-out. It should be very clear and conspicuous, and it should be an easy one button, whatever. But it, it shouldn’t be a framework where somebody has to go and work really, really hard to figure out how to get their rental payments or whatever reported. Because I think ultimately that’s going to hold hold people back from building the type of credit that they need to in order to get approved for better products.

Moloney 44:08
Absolutely. And I know, you know, thinking Ashley about the Experian Boost product that you’ve discussed a bit on this call, you know, it’s, I think about like, you know, going back to the days of when I was working at the US Government Accountability Office researching, you know, the use of alternative data in consumer lending and mortgage lending and rental and utility payment data, such a wealth of information and why? You know, the rental payment data is not, you know, necessarily used in the traditional sense. I mean, there’s a long history there, but, but I’d love to get more thoughts on the pricing and how Experian Boost and your other products are really helping to afford access.

Knight 44:51
Yeah, the boost service definitely pulls in the positive payment information, like I mentioned around utilities and rent and such, which is. Is definitely critical to boosting the credit score. Outside of that, though, if you think about what’s included in bank transaction data overall, it’s more than just payments, right? It also includes income information as well as other sort of payments that may not be put onto the credit file. So what we can do with open banking data, and that access as it’s as it’s consented to by the consumer, of course, is to provide a better risk assessment. So this is really what we’re doing every day. Now, as this, as the industry starts to evolve and the credit ecosystem starts to look to augment credit data, we are pulling in all of this cash flow information to perform data tests to basically show if I were to leverage cash flow in this scenario for this population, how many more consumers could I score as a result of that, when I add cash flow information to credit data, How much lift do I get in terms of predictability? And what we found is there is lift in predictability when you add cash flow and credit data together. And we also have seen that lenders who leverages within their decisioning process can improve more consumers and price more effectively as a result of leveraging this additional data on a consumer. So it not only helps from from a pricing perspective, but just all overall risk assessment. And Erin mentioned personalization, just better understanding the consumer overall and their behaviors, how to engage with them and whatnot.

Moloney 46:42
Now that that makes tons of sense. And, you know, I think it really is about, you know, trying to figure out how, you know, how a consumer might be served when they’re when they’re not being served. And, you know, there’s, there’s been you. I think Ashley, your points lead me to, you know, the conversation around how this data is captured and and making sure that consumers really have, you know, the knowledge and that they’re able to access their data they you know, it’s clear and conspicious terms, as Nat said that, you know, I know it’s an important question around consent and regarding how that that data is being used. And from AFC perspective, we’ve been focused on the importance of using consumer data, you know, in secondary use cases around targeted advertising and also cross-selling products, because we see use cases where that can actually help consumers a little bit more. And I know we’ve touched on that a little bit, but, you know, it would be, I’ll stick with you, but then kind of go around to others, but you know, kind of understanding your perspectives around the data usage in the ways that you know consent matters for serving those, those underserved consumers. So it would be lovely to hear your perspectives on that.

Knight 47:58
So, so I think consent is such a big topic, and it’s so important because the open banking is all around empowering the consumer and giving them control over their data. And I think it’s just going to expand, like we talked about in the beginning. It’s open banking today, but, but there’s also open finance and open data, and I think we’re going to evolve into a world where it becomes open data overall, and the consumers in control of all of that, but it but with that, that means they’re consenting for their data to be used for a specific purpose, and they dictate that. So the consent needs to be very clear. It needs to be concise, and I think there needs to be information that the consumer can see that tells exactly how their data is going to be used and for how long. But on the flip side, I think we need to be careful in terms of how cumbersome we make consent, because we could disincentivize the consumer to share their data, and therefore they miss, may miss out on better pricing, better credit, etc. So I think it’s really about striking the right balance where we’re very transparent about what the data will be used for, and allowing the consumer to revoke access at any time if they want to, but also allowing for use of the data that, while continues to protect them, allows them to get access to more products and services that they may not be aware that they qualify for. So I do think it’s a balance, but I think transparency is critical, and to make it again, streamlined for the consumer, so that they are incented to share for their benefit.

Moloney 49:41
Absolutely. And Erin, you know, I think you know, from your vantage point, the consent conversation has to be so important around financial security and and thinking, you know, broadly on, on kind of the points that Ashley made, but also specifically for, you know, getting people started, like, how do you enjoy? Sure that those, those communities that might not be thinking about the consent of their data and whatnot, they might just be clicking boxes like, how do you, how do you work with them, and how do you make sure that they’re understanding this issue effectively?

Borg 50:13
Yeah, this is a really great question. And I mean, I think questions of trust, questions around, what am I clicking and saying yes to right now in this environment, I think are particularly important. But what I will say is that I think open banking has the potential to unleash this whole world of benefits for consumers who’ve been left out in traditional credit underwriting. And so in order for open banking to actually deliver those benefits to households, I think there’s a lot of work that we in this ecosystem need to do one on setting permissions, right? I mean, there’s whole fields of study around in behavioral economics and messaging, and how do we really communicate this upside? I know Plaid has some research out about if you, if you can demonstrate a tangible upside or a tangible benefit to sharing that data, as in, if you permission this cash flow data, you could potentially get a lower APR or be approved for more products. I think that has been really promising, but we’ve seen this in policy and on the financial service side, there’s a lot of really, really great products and services out there, and yet there are a lot of barriers to people taking advantage of them. So we’re going to see, I think, some early adopters. And we see this now, we see this in context outside the US, that people who are already pretty sophisticated financially are going to take great advantage of open finance, whether it’s on the personal financial management side or using their cash flow data to be able to get better rates. So I think we have some work to do as an ecosystem, which includes being able to talk about the potential upside and what that data is used for, and how it translates into real pricing differences for more people. And I think part of that is pretty fundamental in thinking about Americans, current lack of understanding of what credit scoring is. There’s a comment in the chat I will also say, personally, my husband is an immigrant, and explaining what’s in a traditional credit score and what’s not in a credit score was not intuitive to him, as someone who you know has a lifetime of work history and then coming to the US and starting over brand new. So I think we have to continue to do work on the financial provider side, on the consumer advocacy side, to really drive those benefits toward the households that can benefit the most from them if we do the right trust-building activities and engagement, and really think about how this can better serve consumers.

Moloney 53:14
Absolutely, and I think your point about immigrants coming in and you know, not having really a credit score, it reminds me of, you know, the work that I did way back with the International Rescue Committee, thinking about refugees and asylees, you know, folks who are coming to this country trying to build a better life and their credit scores and any credit data doesn’t travel with them, and so that that creates a huge, a huge issue. And really, you know, again, is another great use case for open banking. Tom, you know, going back to sort of that consent aspect and leveraging your many years not to date you but you know, the many years of experience around you know, how consumers could truly, you know, how do we make sure that consumers can truly understand and have the power that they’re sharing their data, and they’re choosing to share their data effectively.

Carpenter 54:09
Yeah, it’s a super complex topic, and I think I’ll maybe hit on a couple key points. I think number one, open banking, just by its very nature, is more transparent than kind of the non-digital world. So if you think about like, you look at your email inbox, and you’re like, How in the world did I get on all these stupid marketing lists? Like, I’m pretty sure I’d unclicked the box that said send me marketing materials every time I checked out somewhere, and yet, somehow I still get on it. And I got to go through, you know, and unsubscribe everywhere. What we’re seeing with open banking and open finance and data sharing is that you’re actually not just getting that one-time consent, but you’ve got, like, an ongoing consent view. So there’s a proliferation of consent dashboards. So you might see it at your bank or your financial institution website, or you may see it at other intermediary websites that say, hey, you’re still sharing data with this app on your phone. Do you still want to or not, and you have the ability to toggle it off right there. So I think it’s important to think that like there are good, legitimate concerns around consent, but I believe we’re actually moving the needle in terms of more transparency, more control, and more kind of ongoing opportunities to express change, edit, revoke your consent, in a way that we haven’t seen in a lot of products and services to date. So I think that’s number one, a really good thing. And I think you’re going to continue to see more moves around kind of like, hey, how do you boil down that 40-page terms and conditions into simple, easy-to-understand, transparent things that you’ve got to kind of click through on your phone and at the same time, as Ashley said, like, we don’t want to have 100 screens, like consumers usually drop out at that point. So there’s a lot of industry work that’s that’s looking into that. Secondly, in terms of kind of secondary data use, I think it’s important to think about this in a couple buckets. One, there’s the, you know, what is the secondary data use that happens to kind of protect the consumer? So whether you’re talking about fraud, whether you’re talking about kind of cybersecurity. Signals to me, those should just go inherently kind of, you shouldn’t kind of opt-in or opt-out to fraud. It’s like this comes with the product or service, and especially in an interconnected world, you have to have that. Same goes for things where you’re anonymizing or aggregating data to kind of build new products and services. You know, one of the comments that that we had to US regulators was like, you know, if you, if you clamp down too far on this in terms of secondary use, you actually wouldn’t even have the products and services that you’re cheering on today. Consumers wouldn’t have that because you didn’t have a model to build it. And so thinking about kind of a bucket of anonymized or de-identified data that’s used, kind of to build products and services, to enhance them, and to service the ones that are, that are out there. And then I think there’s the bucket of, you know, do you want to permission your data for other offers, other products and services? You might get a better chance at a lower rate, if you do this, that should be kind of, in my mind, another bucket of data use, and so again, all these things to give the consumer more comfort and more tools to understand, like the types of data sharing, and then also the things that, like I can still control on an ongoing basis. Like, yeah, I want to get more offers. Oh, wait, nevermind. I don’t. I just got inundated with 10 mortgage offers, and I chose not to do that so I can turn that off. So I think giving the consumer more tools, more ongoing dashboarding, are all things that are really important. And I just feel like, you know, if you look across the landscape, we have moved the needle in a more transparent, more consumer-controlled way, and I think the industry will continue to do that, albeit with, you know, the valid concerns that will always exist about, you know, is somebody misusing this data to consumers fully understand it. There’s that balance of, you know, we’re opening credit access and yet at the same time, like making sure that we’re not asking somebody to read a 40-page document.

Moloney 58:29
Yeah, I think it’s, it’s really interesting to, you know, kind of keying in on some of the points you made Tom around, you know, the consent conversation, it has some nuance. And really the disclosure conversation has that nuance, and it’s almost, you know, matching the nuance of all the data that’s being provided and how it’s being provided. And so each of those kind of has sort of effects and circumstances dependency associated with it that you know, industry and regulators you know, have to look at. And I know Nat, you, you kind of kicked us off a little bit on this, this consent discussion, opt-ins, opt-outs. So I just wanted to see if there was any anything additional you wanted to add to close this out on, on this first part of the consent discussion?

Hoopes 59:13
No, I think we, we hit it pretty well. I think just really important to always be putting the consumer first, like, what is, what is their need and balancing the desire, you know, to avoid that spam, but also the desire to make sure that that outreach is actually inclusive and useful,

Moloney 59:34
Absolutely, absolutely, well, Tom, you opened up the door for the regulation and data rights conversation so as a wonk regulatory guy myself, I have to walk through it. I’m obligated to walk through it. So I’ll go back to you and turn to that policy and regulatory side of the conversation. I know, at least from the US perspective, the regulatory elephant in the room right now is what’s going to happen with the current. Current final rule on personal financial data rights, implementing Dodd Frank section 1033 for those that are a little bit more steeped in this discussion, going back to our themes of how open banking impacts consumers, and you know, thinking about the nuance of the consent conversation, you What do you see, as far as you know, first off, what open banking systems will look like depending on how the current administration handles the final rule. And then also, you know, what role do you see that sort of section 1033, in the broader regulatory landscape, playing in shaping the future of open banking?

Carpenter 1:00:42
Yeah, I’ll try to not put everybody to sleep on this call. But yeah, I think, in simple terms, what we are seeing around the globe, and certainly the US is a part of this is that there are frameworks being put in place that determines, like, who can play in the ecosystem, ie, you know what? What third parties actually meet requirements or standards to kind of access your data and use it in a safe manner? What are the requirements on data providers or account holders to make data available to you, as well as rules of the road, about like, how that data is shared technically in ways that you know, don’t harm consumers and that maintain safety, like APIs, and then also kind of rules of the road, typically in terms of, you know, how, how can you use the data, what needs to be involved in consent and the like. And so those frameworks are emerging around the world. You probably have a far more lean, far more lean towards a regulatory framework around the world than a market driven framework. But the US being the US, we are kind of a hybrid of the two. And so the regulations that the CFPB finalized in last October were a long journey to get there to essentially, kind of have this hybrid model that provided some bare bones framework requirements as well as some guidance for third parties about use of data, but then left a lot of details to the marketplace to solve that regulation. And the future that regulation is now somewhat uncertain. Trump administration has kind of gone back and forth in terms of whether or not they’re going to amend it or kind of start over or not. I think any of us that are in this spot are watching to see kind of what happens, and unfortunately, I don’t have a crystal ball to tell you exactly what will happen, but I think what the big picture of what we’re trying to understand with regulation are, you know, to ensure that that kind of principle of consumer data access and ownership that’s enshrined in Section 1033 is fleshed out in a way where the ecosystem knows kind of the rules of the road. So if you’re a bank or a data provider, you know what you have to make available, and you also know kind of, what am I allowed to do if I encounter a third party that may not be safe for the consumer, same thing for third parties. How can I use data? What am I not allowed to do? What can I do? And then ensuring, as we’ve talked about already, like that consumer is fully made aware of what they’re doing when they share their data. And so I will just say from from MasterCards vantage point, like our view, is that the hybrid approach is the right one. That said, I don’t know that any market has gotten their framework exactly right. Some, it’s too regulatory, and so you get kind of this compliance mindset. Some it’s too loose. And so you kind of break off into a lot of disparate systems and standards that don’t play together very nice. And so I think we’re still kind of this ecosystem is still trying to find its way in terms of, you know, what is the exact right mix that ensures all this innovation and competition and benefits to consumers take place, and yet, at the same time, put appropriate guardrails inside the ecosystem. So that’s kind of where we stand. Thankfully, I’ll just say, as a cap comment here, Capstone comment, thankfully, the US market is so robust, there’s so much consumer demand for open banking solutions that I don’t know that many consumers will really notice the difference one way or the other. Banks have invested in this because they believe consumers want it. Fintechs are showing up to meet the demand, and a lot of the parties are kind of changing roles every day in terms of what position they play. And so good news for the US is, I don’t know that regulation, it certainly can provide a lot of clarity, but I don’t know that it’s going to necessarily change the trajectory of the marketplace as it exists today.

Moloney 1:04:56
I think that’s that’s wonderfully helpful to kind of set. That, that regulatory stage. And I know I didn’t fall asleep at all, so, you know, so I’m sure our audience is pretty interested as well. And, you know, having that balancing act and that hybrid model, I think is really important to kind of carry through. And Nat, you know, I know you know your way around, you know, government agencies and regulatory, the regulatory space. So I wanted to see if you had any perspectives that you wanted to share about, you know, how, how you see, kind of the the final rule going and and what you see sort of as its impact, you know, however it may come through on the future of open banking.

Hoopes 1:05:39
I just would go back to where we started, which is if it upholds the principle any final version, you know, and or if it’s taken a totally different direction with just simple guidance. You know, obviously there’s this requirement that they do this rule under Dodd Frank, but we’re 15 years past Dodd Frank and now potentially pulling back the most recent version. So what, what is important is that this principle of the customer, you know, really being in charge of their own data, if that is upheld and that we don’t see, you know, roadblocks put in, in the way, or costs added that unfairly burden the customers or other parts of the ecosystem. Then I think ultimately, the bright future that Tom articulated with the continued growth and competition and innovation is going to be preserved. And so, you know, I think everybody just needs to take, you know, the in good faith that that any effort to rewrite a rule is going to be compliant with the law of the land, and it’s going to have to uphold that principle, or else it’ll be struck down in the courts. So that’s sort of the way I think about the issue. And, you know I am, you know, I’m. I do think that we just have a so many advantages. I mean, even just sitting on this panel, you have so many different parts of the system that are, you know, represented, you start to see that our advantages are hard to squander, as long as we uphold that principle of putting the customer’s needs first. So that’s where I would that’s where I would leave it. And I’m hopeful that we’re going to kind of continue to see this upward trajectory of opportunity for people.

Moloney 1:07:36
Definitely. And Ashley, I wanted to turn to you, kind of to get your unique perspective from a product standpoint, you know, thinking about what Tom had mentioned about, you know, whether it’s regulatory-driven and becomes more of a compliance endeavor, or, you know, recognizing the consumer demand that we’ve seen in the US. You know, how are you kind of experiencing the regulatory environment from that product perspective?

Knight 1:08:01
Yeah, well, I can first tell you that when the 1033 paper came out, I think it was October. Keep me honest, I read the whole thing. I was asked to read the whole thing, end to end and summarize. I feel like I’m probably the only one who really read like read it and it highlighted it, I felt like I was back in that you read it Tom okay. So I became very, very familiar with the guidelines and just some guidance. If you ever read one of those, start from the end first, and then go, go backwards, because the end has the summary. Just fun tip there. It’s like the Cliff Notes version. So I will say that, you know, Experian has been actively involved, and we provided comments during that comment period as well. But what’s been fascinating to watch, because we do know that regulations drive so much of the industry. What’s been fascinating is that what I’ve seen from a from a client perspective and user perspective is is even though 1033 isn’t solidified, and we don’t know what will happen, lenders, banks are still looking at this data as another source of very helpful information to better understand their consumers, regardless of what’s going to happen from a regulatory perspective. We’re, you know, highly regulated in the in the credit ecosystem anyway, and so we’re familiar with how to operate. And those that are in this ecosystem are also familiar around FCRA obligations, etc. So this just becomes sort of an extension of that, but just another way to make sure that there’s responsible lending and financial inclusion and so despite the fact that there’s a lot of unknowns and uncertainties and how the data can be used long term and how often, etc,  the clients that I’m speaking with are still running full force. And I think some too, also think they can help shape the future of this. And we believe that as well, where there is a future, where there is credit and there is cash flow together, among other data assets like open finance data as well. So I don’t think it’s going to prevent the use of this data, it’s just eventually likely to put guardrails around it and structure, which I think everyone will benefit from, just so there is more standardization overall in the industry. But I think it’s still full steam ahead.

Hoopes 1:10:35
Yeah, and I’ll just build on that really quickly in another context, which I know means a lot to people on on this call. But fair lending, like a great example is, you know, even as the pendulum swings, and you know, this current administration, you know, is not a fan of disparate impact testing, it’s still on the financial institution or the FinTech company to say, well, what does ECOA say? What does Equal Credit Opportunity Act say? And how am I going to make sure that I’m compliant and that financial institutions, you know that are can safely use us and know that they’re going to be compliant with the actual law, regardless of the regs, the guidance that have come in and out, or where the pendulum swings. And I think it is really so, you know, our CEO said, Well, look, we have really rigorous, fair lending testing, and we’re not going to stop doing it, because, you know that, to us, is what we have to do to remain in in compliance with the Equal Credit Opportunity Act. And so I think a little bit that’s why I kind of keep back, going back in open banking, to a little bit of a similar, you know, reaction to this question of well, does, does the, you know, potential withdrawal of the rule threaten open banking and and I would like to think no, because I think all of the parts of the ecosystem have to faithfully apply the law of Dodd Frank, and they may have to use more judgment than they would if there were a lot of published rules and guidance and so forth from from the agencies. But that judgment ultimately, if they don’t interpret it in good faith, and they don’t take the actual law statute written by Congress in good faith, then they run the risk in court of being found to be, you know, not, not, not reaching the the letter of that law. So I that that is a little bit of the way I think we should all take go forward in this discussion. Is it is always wonderful when specifics are spelled out by government agencies, because it removes discretion. But all of us are smart people who employ a lot of smart attorneys who also, you know, have the best interest of the customer in mind. Because without having the best interest of the customer in mind, we’re not going to have many customers. Right? Ultimately, the information flows too rapidly. And, you know, the information about who is mistreating customers will rapidly rebound around the industry. If you’re, you know, all of a sudden being captive by your financial institution. You say, Well, last month, I was able to share my data and get a great access and now all of a sudden I can’t do it anymore. That, you know, that’s not going to be a tenable situation, I think, for that financial institution if it wants to keep deposit accounts or so forth. So, you know, ultimately, I think we have to have optimism that the system and these laws can really sustain themselves, even in an environment in which the regulations and the regulatory pendulum can swing very rapidly between one approach and another approach.

Moloney 1:13:37
Those are points very well taken. Erin, yeah, feel free to jump in.

Borg 1:13:39
Yeah. I think that’s why we’re optimistic too. Is if there’s a three-legged stool here, the consumer demand is growing and feels sustainable. The provider demand is there. I think this is less of a Tom, as you said, doing this for compliance, and I think genuine investment, both in terms of real R and D infrastructure technology, to be able to work with these APIs and to be able to set up the system. And I think there’s real buy-in to the upside as a growth strategy for financial service providers, as a way to better and more reliably price risk. So we’re also have our fingers crossed. Say, think, despite uncertainty, it seems like the rest of the ecosystem is pretty bought in and committed to this moving forward. And the other thing that I’ll just say is, and we’ve heard, I think now we’re up to like, five or six different acronyms on my bingo card, but I think again, bringing it back to the consumer, another place where I’m hopeful and optimistic about the future is that 1033 was supposed to be designed as a start, and it didn’t cover all of the ways in which people transact in their financial lives. It got. Part of the way there, in both our comments as Aspen and our colleagues, particularly in public benefits and retirement world, we’re pushing for coverage and inclusion in the ecosystem of retirement accounts, EBT cards, all of the ways that households think about their whole financial picture. So I think even if there was not regulatory uncertainty right now, there are still more developments in open finance that we think could really be beneficial for consumers to get that whole picture. So I’m hopeful that even if, even if it stands, we’re not really done. We still have some more work to do to really get the full picture.

Moloney 1:15:47
And I know AFC, you know, in our comment letter, we advocated for the expansion of the data too, because it’s just that the panoply of different types of data it all as we’ve discussed on this conversation, really goes to how consumers, you know what, what is known about them, how they can be, can be done. And I know we’ve had a great conversation, you know, with the prepared questions, but I’ve not, I’ve never seen a more active chat or or quick Q and A section, you know, in any panel. So I’m very happy to kind of turn it over for a quick second to a couple try to get a couple of the Q and A’s going from our audience. One person had said that they’re loving everything that’s been said on the panel. But you know, specifically, how can we get more consumers to opt in and or request or share their data, you know, and get that to a provider for a more holistic view. So I’ll open it up to the floor, you know, and see if anybody wants to jump in and take a crack at that answer.

Knight 1:16:56
I can start just give a quick stat, because we’ve done some research on this, and what we found in our research is 71% of consumers are willing to share permission their bank account data for for a certain benefit. So if they know they can get better pricing, higher credit limits, etc, they’re willing to share it. And so what I think is important is that user experience, flow of information and transparency right out of the gate, so that the consumer knows exactly what they’re what they’re consenting for and why they should do it, so there’s that value chain back to them, and then they’re they’re more willing to Share, especially for for financial services purposes purposes and benefit.

Hoopes 1:17:44
Well, Ian, I see, I think that’s a great answer for that. I see a question I know we don’t have a ton of time, so I’d love a couple of good comments on some of my my points. Just very quickly, it is better when there is a clear arms length regulator that puts out very specific rules. It is better. It’s it provides all of the, you know, ammunition for robust enforcement. So ambiguity is not ideal. I think the point that I’m trying to make around, you know, the a lot of these topics is that it ultimately changes in regulations and guidance Do not ever, you know, in any way limit the liability under the law, right? So the law is still the law, and I think it’s, it’s sort of really important to remember that and to find new ways to hold institutions accountable to the law. So whether it’s community reinvestment act or whether it’s, you know, Equal Credit Opportunity Act, or whether it’s open banking, there are, you know, it’s just important that everybody continue to focus on the intent of those laws, the clear language of Congress, and then to to focus on how to drive the system forward. Because I think the reality that we face is that the pendulum is going to swing and and, you know, I had been hopeful that, because the open banking rule had initiated, had been initiated under President Trump’s CFPB, and then, sort of, you know, there’s a pretty continuous progress through to the final result with a lot of bipartisan work, that it was one of the rules that would that would last and be sort of lasting. And so, you know, I would say, you know, bipartisan, lasting regulation that implements the law and provides detail is the ideal scenario. I think ultimately, you know, we’re going to have to live with a situation in which there isn’t that detail, or in which the pendulum is going to swing back and forth, as as we’ve seen here in the last few administrations.

Carpenter 1:19:51
Yeah, in and I’ll, I’ll just jump in a little bit on the question about, like, how do you, how do you expand consumer adoption on. On these pieces, Ashley, I think I can’t remember what your number was somewhere in the 70s. We actually did a report just two years ago, and we found 90% like, especially when explained that, like, if you do not have sufficient credit history to receive a well priced loan, like, Would you be willing to share data to move that needle. And so we found 90% we found we’ve seen a lot of other numbers around different use cases in the 80s and 90s as well. So I don’t think, at least from the numbers that we’ve seen, there is not a lack of consumer trust or willingness at play. I think oftentimes there is simply a lack of consumer understanding about, if I share, what is the, what’s the value exchange that I’m doing here? And I, you know, ultimately, to me, open banking is kind of the bonus card of all financial services. You know, like most people don’t quite think through when they sign up for the grocery store bonus card, or if you’re traveling somewhere and you’re like, I don’t know, I got to just fill this out real quick, but you know you’re exchanging basically, I’m gonna let this grocery store know what I’m buying and who I am in exchange for $1 off Tostitos. And so that ability to just know, like, Hey, I see the price, and then I see the bonus card member price, and I want that. And so sometimes I think it’s just we need to do a better job as an industry. But I think certainly with the partners and folks that are on this call, like doing a better job explaining why kind of these new innovations can be so valuable with all the right caveats, if you need to understand who you’re sharing your data with, and you need to be in control of it and the like, better understanding, I think will yield even stronger adoption. But I think there’s just no question that consumers are willing to do that exchange if they feel that there is a distinct value for them to be had no

Moloney 1:22:02
Absolutely, and those, those are all points very well taken and staying with the Q and A. I know we’re running up on time, but I wanted to touch on, Erin, your work with Aspen Institute’s financial security program and their national financial inclusion strategy, thinking about sort of the regulatory environment, as well as the need for open banking to not perpetuate things like redlining historical issues that have really harmed a lot of communities. What do you see as how do we ensure that open banking is sort of helping facilitate that national financial inclusion strategy? Yeah,

Borg 1:22:43
I think so. First, when Treasury released their inaugural financial inclusion strategy in October, their second priority was expanding access to safe and affordable credit, and when you read through the set of treasury recommendations, so much of them are related to open banking and looking at enhancements to or complements to traditional credit underwriting. So I think the national financial inclusion strategy put a number of really important markers down or stakes in the ground, but I think possibly part one of the most important things that they did was really say explicitly, for the first time, in a US government document, that inclusion is not just access to a bank account. And I think all of the use cases that we’ve talked about today, I think help make financial inclusion, as we think about it, which is access, use and benefit from a range of products and services, more likely to be a reality. And to the comment about the question in the chat about redlining and zip code, what I would say is that I think cash flow data is a perfect example of how more data and better signals and more liability about people who have been excluded is to the benefit of the people who have been excluded. So right now, if you are looking at someone who has thin file or no file. If you are applying for credit, they have your address, they have your zip code already. So what a data set like cash flow does is paint a fuller picture about who this person is, what money is coming into their household, what money is going out of their household. And I think that is a really useful counterbalance to historical exclusion in ways that some other signal, signals that are limited might give you less reliability than we, than financial institutions have or credit reporting agencies have. Been able to even see in the past themselves, which is why I think we’re really bullish on cash flow as a as a set of signals that could be more reliable and scale more quickly to more people than something like rent reporting as an example, which sounds really good in theory, but the infrastructure that’s required to set up rent reporting, especially from Mom and Pop landlords or people who are staying in the house that their aunt and uncle loan. They’re not going to get the benefit of that rent reporting on their credit data, but they will if it’s cash flow, because although the US has something 5000 banks and 4000 credit unions. I’m going to get those exact numbers wrong. Although we have many, many more banks and credit unions financial institutions than other countries of our size, as far as I know, we don’t have a lot of mom and pop banks that serve one to two people. So I think when we think about some of the benefits that can scale and serve communities that have been excluded. I think I’m really optimistic that it can be a counterweight.

Moloney 1:26:08
That’s that’s a great understanding of financial inclusion and how it impacts, and really having, you know, sort of from a research perspective, having the the law of large numbers apply, or, you know, at least the multiple data points. I think that’s that makes a lot of sense. So I know we have a ton more questions in the chat, and I’m very sorry that we’re not able to get to all of them, but I think, you know, first off, I want to, you know, say, at least from my perspective. You know, please feel free to connect with me on LinkedIn. Send me emails if you have questions. You know, additional ones that were not answered here, please, please feel free to send me those, and I’ll be happy to answer any I can. But I want to thank our great panelists for what has been a lovely conversation. I know the recording of this will be made available, and yeah, I hope everybody has a great rest of your day. So thank you all for for participating and thanks for our audience for attending.

Thanks, all, thanks all NCRC, you.