My connections keep breaking, and I’m losing customers.
I’m paying so much per user for them to link all their accounts.
I can’t do anything with my data because it’s so messy.
These thoughts have all been shared with the FinGoal product and engineering team over the last two years.
FinGoal understands the challenges. They actually switched their original aggregation solution soon after starting out because it was no longer meeting their needs. And that switch inspired them to build their newly launched Aggregator Switch Kit.
Data aggregator companies, like Plaid, MX and Yodlee, access data by creating a portal for users to link their off-bank accounts and share that data with authorized fintech partners.
David Nohe, CEO of FinGoal, says that data aggregators have two main roles.
“One is to verify that you own the account and that you are who you say you are, which is needed to simply move money between your accounts. The second is to routinely grab your transaction and balance information.”
But, not all aggregators are created equal and each performs a little differently.
Because of the slight differences between each aggregator, some are a better fit for a company over other aggregators. But, Nohe explains that organizations may have ended up with an aggregator that isn’t meeting their needs.
“A lot of companies picked an aggregator years ago because it was the fastest way to get started when they were a small startup. But as these platforms have grown, they've realized that the aggregator that they chose a few years back, is not necessarily the best fit for them.”
FinGoal has learned from its customers that there is no single reason companies want to switch. It’s usually a combination of reasons. But the top reasons are the ones mentioned at the beginning of this article:
Financial Institutions and fintechs platforms often rely on users’ linking their off bank data. If those connections are constantly breaking or if your aggregator doesn't cover all your users' banking accounts, then your user experience suffers. Beyond customer frustration, you face a potential decline in usage or account closure.
Some aggregation solutions in the market may also be too expensive for your platform. While your aggregator may have worked initially, at scale, the pricing model is no longer cost effective. “Now that companies have expanded,” shares Nohe, “and they have a richer platform and a more mature company with a more mature product, they may find that the current aggregator may be falling short.”
And quality data is essential. Consumers have come to expect a hyper personalized experience across industries, and the financial services have lagged behind. Data powers personalization, and for developers to create the necessary innovations for the fintech industry, access to superior data is crucial.
Nohe, CEO of FinGoal, understands this phenomenon firsthand. “We're an insights platform. So we needed the highest quality, most reliable, widest coverage of data, especially transaction data, for us to do what we do. Our value prop is to understand who end users are, and what they care about based on how they're signaling with their wallets. And we can only do that, if we have complete visibility into their wallet.”
FinGoal demoed the Aggregator Switch Kit at FinovateSpring in May and won Best of Show. During the demo, VP of Product, Ariam Sium, summed up the need. “We need our customers to have high quality data with good economics so no one is worried about users linking too many accounts. No one aggregator is perfect or is right for everyone…. The best data should win, and [your] platforms shouldn’t be held back by vendor lock to the wrong aggregator.”
Stay tuned for part 2 of our series: What to Know if You’re Rethinking Your Aggregation Strategy.
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