March 5, 2022 / VOLUME NO. 199


How I Learned to Love Open Banking

I have always been skeptical of the buzzy phrase “open banking.” It’s vague. It’s trendy. 

My evolving definition is that open banking gives bank customers ownership of their financial data and third parties permission to access it from the customer’s bank. Still, I wasn’t sure how I would benefit as a customer from that interconnectivity and data ownership. 

Like many millennials, my finances are fragmented. I have 20 accounts across eight banks, including three checking accounts and eight credit cards. In addition to that, I have two retirement accounts. Without knowing it, I was perfectly positioned to have my scattered finances united by the principles of open banking.

Enter “You Need a Budget.” You Need a Budget, or YNAB, is software that assembles a holistic view of a user’s collective balances to create a customizable budget that allocates funds to various items: rent, car loan, groceries, the gym and maybe a vacation or some shopping. 

I think it’s safe to say that many people, for a number of reasons, feel like their money is out of their control. They can’t keep track of their expenses, they can’t time their cash flows and they can’t strike a balance between saving and spending. While I know many readers of this newsletter have long mastered budgeting, many people — including younger folks like me — haven’t. So, open banking has been life-changing for me.

The concept of open banking is fundamental to YNAB. The company allows users to connect their bank accounts to their budget and download transactions using services from Finicity, MX, Quovo and Plaid; users can also manually import their data. Additionally, users must clear their transactions and reconcile their accounts every day, making sure the data is as accurate as possible.

Of course, there are disputes and unanswered questions. Banks have valid privacy concerns when customers give login credentials to third parties; some have blocked or temporarily disabled users’ third-party login access. Plaid settled a lawsuit in 2021 for $58 million that alleged it harvested and sold detailed financial data without customer consent. The company agreed to make changes to enhance privacy.

All this is to say, it’s unclear what open banking means for banks in the future. But the concept — and the idea that I own and should be able to use my data — finally made it possible for me to feel in charge of my money. 

• Kiah Lau Haslett, managing editor of Bank Director


A Front Row Seat on Banking’s Consolidation

In the latest episode of the Slant podcast, Editor-at-Large Jack Milligan talks to storied M&A advisor H. Rodgin Cohen for his reflections and outlook on the banking industry.

“Cohen addresses the impact that consolidation has had on community banks.”

• Jack Milligan, editor-at-large for Bank Director


The Role of Transfer Agents in Corporate Actions

Banks undergoing high-profile events, like mergers or spin-offs, use transfer agents to ensure everything goes smoothly.


The Merger Compliance Issue You May Not Have Considered

In a deal, the first communication a customer at an acquired bank receives is often the last item that bank executives review in their M&A plans.


Banks Inherited a Wholesale Balance Sheet During the Pandemic. Here’s What to Do.

Banks should create a game plan to utilize excess cash and liquidity.


Should More Community Banks Be B Corporations?

Does B corporation status give some community banks an edge?