Lowell Putnam, CEO of Quovo highlights 5 questions you should ask your aggregation partner including: Do you aggregate all of your data yourself? What value-added services can you provide with the data and finally do you sell customer data to hedge funds?
Investment firms, including hedge funds, often buy datasets from account aggregation providers to gain insight into consumer-purchasing patterns. While the data may be anonymized, it’s typically sold without the knowledge of the end consumer owning the account (or is buried in the fine print). Given the choice, it’s hard to believe that customers would permit their data to be sold in such an opaque way. Furthermore, the unpermissioned sale of data to third parties breaks a number of the Consumer Financial Protection Bureau’s recently issued data-sharing principles, which were designed to protect American consumers. While this issue has been only lightly covered in the press, it’s important to consider how your clients would react to finding out that their data was being sold without their consent.