The future of financial services lies in consumer-permissioned data. Innovation in this space is about connecting the dots between consumer bank accounts and third-party apps, services and resources. But its about more than that. Its about translating those connections into improved financial wellness and inclusion.

To enhance these benefits, industry focus must be on facilitating consumer empowerment. True empowerment only comes when consumers have access to the information and insights they need to make the best financial decisions for themselves, their families and their businesses. This brand of authentic empowerment will, in turn, drive consumer trust in the data sharing process.

Unfortunately, empowering consumers is all too often an industry buzzword, superficial and empty of any real commitment. There are five key requirements that financial services providers (from banks to data providers to fintechs) need to emphasize if they are to make empowering consumers a reality. These requirements are control, access, transparency, traceability and security. Dedication to not only recognizing these five key areas, but to enhancing each one, will produce products and processes that consumers can feel comfortable trusting with their personal financial data.

Control

Ultimately, its not enough to tell consumers that we have their best interests at heart. We need to give them the ability to control how their data is shared, who has access to their data and how their data is used. Informed consent and centralized permissions portals are two areas where meaningful changes can be implemented.

Informed consent is central to consumer control of personal financial data. And that consent needs to be accessible. For example, navigation systems within applications should showcase designs that are intuitive and user-friendly. Any and all consent language needs to be clear, as concise as possible and easy to understand. Not only is this in everyones best interest; its what consumers are demanding. Too many steps, too much indecipherable fine print and too many confusing processes inhibit informed consent and make things difficult for consumers.

Finally, developers and designers of financial services products should build out centralized permissions portals. These types of portals allow consumers to easily view, modify, add and revoke permissions across their library of financial services. When permissions are buried out of reach, informed consent has not actually been reached. Power only exists when control can be exercised and managed.

Access

The second requirement we need to focus on to encourage true consumer empowerment is access to personal financial data. Account ownership should equal data ownership.

As with control, accessibility depends on ease of use. Service providers should deliver a simple, intuitive process for authentication. Basic user experience changes include minimizing unnecessary steps in every user process and avoiding language that might cause confusion, delays or friction. We know that time-consuming or confusing digital experiences lead to lower rates of adoption. Unfortunately, when consumers abandon a process that does not meet their expectations, they may be missing out on services that would benefit them.

Transparency

Third on the list of requirements is transparency. This transparency manifests in two primary ways. First, consumers must always be able to view, manage, modify and revoke permissions. Second, service terms must be clearly explained. These terms should detail data handling and privacy agreements. Consumers must know exactly who will be accessing their data and how that data will be used. They must also describe consumer options and the consequences of any available choices. Its time to find creative ways to incorporate these terms across the onboarding experience rather than reserving all terms and conditions for a lengthy document at the end of the consumer registration process.

Traceability

Transparency and traceability are twin functions. Traceability ultimately depends on transparency. Comprehensive traceability means that both consumers and data users should be able to map out the routes data takes along the data-sharing network. Each step, each transfer, each service provider should be clearly delineated. This also ensures that security breaches can be quickly and efficiently managed. All parties involved with the data in question should be automatically notified so they can enact proper security protocols.

Security

Finally, any discussion of empowering consumers would be incomplete without careful consideration of security. All financial service providers must have security policies and practices in place to protect consumer data. This means constantly adjusting security measures to include advances in encryption and tokenization technologies. Security and transparency work together. For example, explicit clarity related to data definitions, usage and privacy should be provided to consumers so they can make informed decisions related to data handling and privacy.

In the end, it doesnt matter how convenient or how cutting edge a tool is. Without consumer trust, even the most potentially useful solution will never gain traction in the market. Whats needed now is an industrywide commitment to strengthening consumer control and access and to enhancing transparency, traceability and security throughout the data-sharing process. Only then will we fully earn consumer trust. And its this trust that will launch the future of financial services innovations.

Originally posted here:
Financial Services Can Secure Future Innovation By Focusing On Trust - Forbes