One area that was particularly sensitive was which party is responsible in the event of an infringement. The new model agreement requires data recipients to cooperate with banks on cyber risks and reimburse lenders for all costs associated with an infringement that occurred under their control. „Data exchange agreements are an essential part of bank-fintech partnerships, but also a significant barrier for players with limited space experience,“ he said. „The clearing house`s framework of agreement is a good first step in facilitating and promoting cooperation. It should only be seen as a starting point to find the right way to meet the needs and concerns of banks and fintech to better serve end-users. Among other things, the model agreement usefully describes a number of defined terms that banks and fintech can use (all capitalized terms that are not otherwise defined have the meaning that these terms are attributed in the standard agreement). This alone will likely reduce the difficulties arising from differences of opinion as to the importance that these concepts attributed to data exchange agreements. In addition, the recipient`s access to account information and the restrictions imposed on these provisions will be discussed. „Financial institutions are developing safer and more robust IPAs to exchange data,“ says Dave Fortney, Senior Vice President of Product Management and Strategy at the Clearing House. „They enter into contractual agreements with fintechs that use these APIs, which takes a lot of time and energy.“ „The model offers banks unlimited opportunities to block applications,“ Sima Gandhi, Plaid`s director of business development and strategy, said in a statement to Innovation Bank.
„We would have liked a more scalable and pragmatic approach to helping financial institutions integrate the security we all support and need regulators, while encouraging innovation and competition.“ The use of the agreement is optional and the parties can negotiate or modify all elements independently; it is intended to facilitate negotiations and conclude non-trade agreements. The TCH model agreement is based on banking controls that do not work on a fintech scale, as is the case today, where consumers and small businesses can choose from more than 3,000 innovative applications and services. And it won`t work for a future where those decisions will continue to grow. To view the chord template and provide feedback, visit www.theclearinghouse.org/connected-banking/model-agreement.
