Why Your Business Should Embrace Open Finance → Learn More
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This post was written by Yasser Abou-Nasr, Senior Vice President of Product at Dwolla.

When I think about being an end user in a post-pandemic era, with so much digital transformation around financial products and services, my expectation is for an immediate and hyper-personalized experience with almost every financial product I interact with.

When it comes to the financial market, products that integrate real-time data capture and analysis capabilities into their customer experience satisfies the rapidly changing demand of seamless and immediate personalization. And of course, taking into consideration identity and account verification and customer behavior.

As a top trend, Open Finance continues to grow amongst non-bank and non-financial institutions looking to deliver a service proposition involving real-time financial services as a component to their core offering. Open Finance providers are creating token solutions that utilize consumer-permissioned data to increase the speed and experience of account opening and money movement processes between these markets and their payment processors. These Open Finance providers are an extension of Open Banking, providing financial accounts with the ability to act on financial data and personalized insights.

These token solutions empower users to make choices about sharing their data. The user controls the sharing of money movement data sets with their specific service provider.

Recognizing the value in allowing for simple and secure data sharing, Dwolla created the Secure Exchange solution to allow our clients to have a choice among data providers to complement their account-to-account transactions. These partnerships are creating further opportunities to enable data driven decision making for our customers.

How does the Secure Exchange Solution work?

Dwolla clients can work with any of our Open Finance partners, which today include Plaid, Finicity and MX. Using Dwolla’s Secure Exchange solution is pretty simple: our customers pass sensitive data to a secure data provider in exchange for a token, and then pass the token to Dwolla. Dwolla will use that same token to retrieve specified data from the provider and use that information as instructed for initiating account-to-account transactions.

Today, this data is account verification information that we’re using for the purpose of initiating account-to-account transactions. However, Dwolla designed the Secure Exchange solution to expand on all data and token handling as a straight exchange.

The real value? The platform creates a seamless experience for users to share data with data providers and initiate account-to-account payments. Welcome to Open Finance and Open Banking.
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Using Tokens to Verify Information

With tokenization, any sensitive data is replaced with a surrogate value known as a token that removes the risk of handling the information but preserves the value of the information for a business to repurpose immediately or at a later time. If the token is stolen or accessed by an unauthorized user, no actual identifiable information is available in the token itself.

With the Secure Exchange solution, your application is only handling a token while Dwolla and the data provider handle the sensitive information. Clients of our Secure Exchange partners only receive these masked tokens that allow them to verify a funding source.

Which explains why this solution could work for your business:

  • Data is exchanged between two trusted parties.
  • The parties that are touching that data have environments certified to handle data directly and repurpose it for value.
  • Your focus stays on getting to market and providing a great customer experience.

We want to champion the expansion of data access and user choice. Create a personalized experience using Open Finance and Open Banking secure solutions. Reach out to our team and let’s talk through your use case.
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