Montreal-based FinTech startup Flinks unveiled a new update to its data analysis platform, saying that Flinks Enrichment can now be used as a standalone analytics engine on top of a FinTech startup or bank’s data source.
The updated analytics platform sits over top of the raw transactions data from other open banking providers as well as financial institutions’ own data.
“This is kind of taking open banking to the next level before the regulations are put in place.”
The update arrives after both the Liberals, and the Conservatives pledged to introduce open banking during the election campaign. The Liberal Party said it would put in place the recommendations released prior to the election by the Advisory Committee on Open Banking by 2023.
But it looks as if Flinks isn’t waiting for federal legislation on open banking.
“This is a market-driven solution that was at the request of our clients,” Clayton Feick, Flinks’ CRO told BetaKit.
“In our view, open banking is already here today in Canada, and we operate in the US as well. This is kind of taking open banking to the next level before the regulations are put in place,” Feick said.
“It’s using data to drive decision making, which is really the power of open banking,” Feick added.
Flinks Enrichment lets FinTechs and financial institutions convert raw financial data into meaningful, actionable insights. Once deployed, it can provide over 1,800 different insights that help analyze customers’ income, credit and fraud risk factors, and other key aspects of their financial profiles.
According to Feick, the solution allows firms to make smarter decisions with data.
As an example, if lenders want to make decisions about the risk they’re willing to take on or the potential default of a customer, it doesn’t help just to look at transaction data that’s just tagged as income or expense,” Feick explained.
“What you really want to do is run some deep analytics on that individual or that business to learn as much as you can about them to build the best possible model,” Feick said. “From a lender’s perspective that is their proprietary advantage, is to have a model that is smarter than anyone else so they can make the best lending decisions.”
The cost of the solution is based on the volume of API requests. “If an individual is running more data through it then it will be more expensive, but the idea is they’re getting much more value from that,” according to Feick.
Flinks has hinted before at taking on Plaid, a FinTech startup that also helps connect consumers’ bank accounts to financial applications, and which raised $425 million USD in a Series D round of funding in early April.
But Feick said the new solution is something that’s complimentary to Plaid and others in that Flinks can work with other open banking providers to “meet the demands of our customers that are looking to build out their tech stack to be able to work within the new open banking framework.”
In terms of competition, Feick pointed toward categorization that, as the name implies, categorizes different types of transactions data. However, he maintained “Enrichment is categorization on steroids.”
The update to Flinks’ platform comes after the National Bank of Canada took a controlling interest in Flinks in August. At the time, Leboeuf said Flinks would put the $30 million capital it received towards expanding its product offering analytics and data enrichment.
With its updated technology, it appears Flinks is moving ahead on open banking even while the Liberal government was accused of dragging its feet on the same. A number of FinTech startups expressed their frustration to BetaKit in May that after two years they were still waiting for the Liberals to deliver the Advisory Committee on Open Banking’s report.
When released in August, the report committee said the government should move forward quickly to put in place a hybrid, made-in-Canada system of open banking. They call for it to be introduced in phases. The first phase would include the design and implementation of the “initial low-risk opening banking system.” The second phase would involve the evolution and ongoing administration of that system.
The committee called on the government to designate an open banking lead who would be responsible for convening industry, government, and consumers in designing the foundation of an open banking system. The design would be completed within nine months of the appointment of the lead, and following a subsequent testing and accreditation period, the system should be operational within 18 months, the report recommended.
The report also called for the federal government to address financial screen scraping and replace it with an open banking system that is “safe, regulated, efficient, and protects [consumers’] interests.”
In the absence of a formal open banking policy – something the United Kingdom, Australia, and the European Union already possess – open banking services in Canada have commonly been taking place through screen-scraping.
Screen scraping requires consumers to provide their online banking username and password to access financial data. That method can pose security risks as the data is then transferred to a company’s external database.
“The core objective now is to realize consumers’ right to data portability and move to secure, efficient consumer-permissioned data sharing enabled by a system of open banking,” read the report.
Flinks enrichment platform differs from data scraping as it is used to turn raw data into insights.