More and more third-parties are requesting to access users’ financial and accounts information to run their apps, one of the most common use-cases is account aggregation and personal financial management tools. Recognising the trend toward innovation models, the recent Monetary Authority of Singapore (MAS) initiative introduces a regulatory sandbox for Fintechs.
Ms Jacqueline Loh, Deputy Managing Director of MAS, said, “MAS aims to provide a responsive and forward-looking regulatory approach that will enable promising FinTech innovations to develop and flourish. The sandbox will help reduce regulatory friction and provide a safer environment for FinTech experiments. We believe this will give innovations a better chance to take root.”
Singapore is taking extraordinary steps to help verify a Fintech’s proposition quickly in the market. The regulatory sandbox initiative would encourage innovation without it being nipped in the bud out of fear of future regulation.
Giving new Fintech start-ups access to user’s valuable personal financial data could weaken their personal data privacy, unless the tech company gives the user full control over their data through a true permission-based data sharing schema. Users are more concerned about their data privacy when selecting an online service.
Asia One Newspaper highlights this aspect “MAS will not compromise on requirements in areas such as confidentiality of customer information”.
Data mining, i.e. extracting useful information from large data sets, is allowing companies to benefit from user’s personal data. In the financial industry, it means that companies will use credit card and bank account data in order to learn from user’s behaviours and push personalised offers based on their spending habits. Once access to the user’s data has been provided, often through Terms of Service that run into thousands of words and often un-read by users, the data makes it way to an ever increasing number of companies as each seek to monetise its value.
Fintechs with more responsible approaches to data will provide the end-user with the ability to gain control back over their data and decide what they share with who for better service and enhanced products.
That’s fair data sharing!