Open Financial Exchange (OFX) is one of the banking industry’s most common APIs, allowing financial institutions to aggregate data and link that information to their financial applications.
But with data security becoming a more prominent concern in FinTech, OFX has rolled out a heightened security measure for its services.
A Thursday (April 7) release said OFX is now seeking public comment over its upgrades, which use a token-based authentication model to safeguard the collection of data within banks.
“The explosion of FinTech apps using data aggregation in recent years has led financial institutions to explore more efficient and higher-quality data access methods for their accountholders,” the company said in its announcement of OFX 2.2.
The firm explained that tokenization and other measures now allow financial institutions to direct data aggregators and apps towards temporary tokens in order to access the data they need.
Banks have been pressured by their customers, both consumers and businesses, to protect client data. Last year, an industry battle broke out between some of the largest banks, including JPMorgan Chase, Wells Fargo and Bank of America, and financial services companies that use data aggregation to help customers manage their money.
In an effort to protect bank data, the financial institutions cut off the flow of data to some of these financial services websites, reports said, claiming that sites like Mint and other alternative financial management companies don’t have the same data security standards as FIs.
Around the same time, a survey released by Computer Services, Inc. found that data security was among the top concerns — if not the largest concern — for bank customers.