Envestnet inks data-sharing deal with Wells Fargo amid FTC inquiry
The agreement is meant to increase protection of consumer data shared with supported apps
Envestnet Yodlee announced Thursday it has inked a deal with Wells Fargo & Co. to exchange customer data with more than 1,400 third-party financial applications — after the leading TAMP by assets answered pointed questions from the Federal Trade Commission about its data sharing practices.
Envestnet has entered into a handful of data-sharing partnerships with major financial institutions in the past 18 months — including Citi, JPMorgan Chase, and Charles Schwab — and the latest agreement expands its reach into the consumer banking and financial data sectors.
The data exchange agreement will increase protection of consumer data as customers can pick and choose what financial information is shared with Envestnet Yodlee-supported apps, according to senior vice president in Wells Fargo’s Strategy, Digital and Innovation group Ben Soccorsy.
“As we help customers navigate these uncertain times, we want to enable them to connect with and use third-party apps that help them manage their finances and do so in as secure a way as possible,” Soccorsy said. “In the future, our customers will be able to share their financial information with enhanced ease, security and control.”
Wells Fargo customers will be able to opt in to share their account information with fintech apps on Envestnet’s platform, and customers will be presented with a “turn on and off” option for data sharing via Wells Fargo’s banking app Control Tower, according to the announcement.
Customers will also be able to select the information they want and do not want to share with these apps, according to a release.
“These are apps that help consumers with all facets of their financial wellness including spending, borrowing, saving and planning,” said an Envestnet spokesperson. “These digital experiences can be utilized through a variety of use cases from either a financial institution or FinTech and include saving for retirement, cash flow, personalized insights, financial planning, and investing, among others.”
The companies didn’t provide a detailed timeline for when they will launch the data exchange option, but the expectation is to bring the experience with selected Envestnet Yodlee customers this year, according to the announcement.
Yet, lawmakers have expressed concern that data exchange agreements could do more harm than good. Three members of Congress asked the Federal Trade Commission in January to investigate Envestnet Yodlee to determine if the way the data aggregation firm sells consumers’ personal financial data is breaking the law.
During a company earnings call in May, Envestnet CEO Bill Crager confirmed the regulator has been in contact with the firm to better understand its underlying data-sharing practices.
“The Federal Trade Commission (FTC) requested information from Envestnet Yodlee,” according to the spokesperson. “We are fully cooperating with this request and look forward to resolving this matter with the FTC soon.”
Consumers have also looked to protect the privacy of their data and have lobbed lawsuits against Envestnet Yodlee in recent weeks. A proposed class-action suit alleged the TAMP failed to safeguard consumer data, putting consumers at risk of fraud and identity theft, according to the Aug. 25 complaint filed in the U.S. District Court for the Northern District of California.
Despite past hurdles, Envestnet expressed confidence in the announcement that the data exchange deal with Wells Fargo will enhance transparency, control and protection of customers’ data, according to Envestnet Yodlee senior vice president of data access and management Chad Wiechers.
“Our agreement with Wells Fargo — in conjunction with our recent data sharing agreements with other major U.S. financial institutions — enables even more consumer choice, protection, and insight, ultimately giving consumers more control and an improved overall financial wellbeing — something that is vital during a particularly uncertain economic landscape,” he said in a release.
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