Increased data sharing among third parties will change consumers' risk profiles, pointed out Michael Nugent, managing director of Vestigo Ventures in Cambridge, Massachusetts. But what we're seeing across the ecosystem is a lot of new providers that are focused on helping mitigate some of these risks." "The guidance so far has been very light on who ultimately will bear the brunt of that all. "The biggest thing when it comes to open banking is with the portability of data and if you take it a step further and think about easy access to payments or instant payments, that creates an entire new ecosystem for fraud, for liability, not just data lost but also dollars lost," Man said. The VCs acknowledge the risks of a freer flow of bank account information, including fraud, theft and misuse of data. "As a human, I am a big proponent of open banking because I think it will close the socioeconomic gap through everything from alternative credit scores, alternative investments to cross border payment options." "As an investor, open banking is incredibly interesting to me because of the innovation and creativity," said Elle Bruno, managing director of the Techstars Boulder Accelerator, which invests in pre-seed and seed start-ups, at the conference. Some people refer to these forthcoming regulations as "open banking." Section 1033 of the Dodd-Frank Act of 2010 required the CFPB to come up with rules for the sharing of financial data between companies the agency is expected to complete them in 2024. But true portability of data and consumer rights around that data that exist in Europe, like the right to be forgotten (in other words, have all personal data erased) by a company, do not exist here. Data aggregators like Plaid take data from banks and give it to their fintech clients. Open banking doesn't truly exist in the United States today because there are no laws that require it.
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