Tech

Prevent financial fraud, increase trust and make open banking a reality with account tokens


Presented by Envestnet | Yodlee


Financial fraud is on the rise as data sharing becomes more complex. Stream this VB on-demand event to learn how payment processors can get involved and stand their ground against data breaches and bad actors, with ways to retrieve, verify and Highly secure data sharing.

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Digital financial services and applications, which provide convenient ways for consumers to pay for products and services, send and receive money, and manage investments, have become the norm. . But as digital interactions increase in the financial ecosystem, regulatory compliance becomes more important as the risk of fraud grows exponentially.

Account verification is an important first step. Before any transaction, a financial services company must verify that the funding is valid, the account has sufficient funds, and that the funds belong to that customer. Account verification, in many cases, reveals ownership and banking details to the financial services company. With the required infrastructure and compliance required to manage and maintain banking data, account tokens serve as a highly secure way to retrieve, verify, and share financial data. verified account.

“We have an obligation to protect customer data at all times,” said Lloyd Fernandes, Vice President, product management at Envestnet | Yodlee. “That is why the industry and companies must consider adopting the most secure account verification standards.”

Why account tokens matter now

When customers log into a website or an app, they are transferring extremely sensitive data to the fintech or organization running the workflow, whether they are opening an account or making a payment. The financial services company has access to ownership information, balance information, and bank account data such as routing and account numbers.

“Verification is enhanced owner profile information,” says Fernandes. “AI and ML-powered transaction analytics can provide more sourced information about bank accounts, opening up better methods of account verification and thus new revenue opportunities.” than. All of which means that the account token is important, because it now serves as a starting point for a number of different possibilities for which account verification could be the appropriate solution. “

Consumers give up that information in exchange for ease and convenience, such as quick logins and speedy transactions – but in return, they also expect that data will be saved, used, and transmitted. Go safely and securely.

“That’s where account tokens also play a big role,” said Fernandes. “As sensitive data is always encrypted, from the moment it is originated to when it is used, that token becomes a secure means of transport from account verification to transaction. Only the data needed to verify the funding is transmitted, the data is encrypted, and the user credentials are managed securely throughout the entire process.”

The token-based authentication protocol eliminates the hassle because once it verifies the user’s identity and issues a unique access token, the client can easily access that service without having to enter it. login information each time. But the token also provides a second layer of security and gives administrators more visibility into user actions on the site, while still protecting sensitive user data.

Tokenization ensures that a customer’s bank account and routing number are never transmitted with a payment. It reduces the likelihood that customer account information will be stored with third parties, like retailers, fintech apps, and more. And when a system is compromised, the token can be invalidated, rendering it useless.

Account tokenization and the transition to open banking

Today, consumers are used to using account tokens for their credit and debit cards — for example, the cryptographic framework used by Apple Pay and Google Pay, which enables seamless payments over the phone. phone.

The banking industry has never really embraced the idea of ​​cryptography for real-time payments, but fintechs are adopting the solution, making authentication tokens more popular than ever. And now we also see real-time payment services FedNow and THC advertising these secure tokens to keep customer bank account numbers hidden from third parties. This is driving the industry towards a standardized cryptographic protocol and is a huge boon to a successful open banking solution.

In an open banking framework, a token represents a consumer’s credentials at a financial institution. Consumers can have any number of tokens associated with them, across multiple financial institutions. With tokenization, open banking – allowing third parties access to financial data through the use of application programming interfaces (APIs) – becomes much more secure.

“Very quickly, consumers will have secure, fully encrypted wallets to prevent fraud,” said Fernandes. “Open banking protocols are safer and easier to implement than ever before, making them even more likely to be adopted by customers.”

To learn more about how validation tokens are improving the way financial services companies serve their customers, how they fight fraud, and what the token means or the future of the industry, visit access this VB On-Demand event.

Start streaming now.

Agenda

  • Learn how account tokens work to reduce the risk of data theft
  • Protect sensitive financial data from hackers and bad actors
  • Simplify complex account verification processes
  • Eliminate the need to store sensitive financial account information
  • Prepare for open banking and open financial opportunities

Presenters

  • Jeff WilliamsProduct Development SVP, The Clearing House (TCH)
  • Ginny ChappellEVP, Product & Marketing, Moov Financial
  • Lloyd Fernandes, Vice President, Product Management, Envestnet | Yodlee
  • Chris J. PreimesbergerModerator, VentureBeat

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