Banking core technology provider Jack Henry is teaming up with Mastercard-backed financial data aggregator Finicity to bring open banking capabilities to community financial institutions.

The open banking partnership comes on the heels of Jack Henry’s quarterly earnings report released Tuesday, which exceeded expectations on earnings, clocking $0.95 in earnings per share.

Open banking allows customers and financial institutions to get an aggregate view of financial data in a uniform and permissioned way. This way, customers can control how their data is used by third-party providers while at the same time presenting a fuller financial picture that may be otherwise separated in buckets in different banks or credit unions.

The data aggregator’s platform, currently used by Experian, Ellie Mae and others, will be integrated with Jack Henry’s Banno Digital Toolkit, a collection of software gateways, or APIs, that allows banks and financial institutions to directly plug third-party services into their apps, the firms announced Wednesday.

“Finicity and Jack Henry share a goal of providing the industry with open banking standards that enable consumers to access, use, and benefit from their financial data,” Steve Smith, head of global open banking at Mastercard and chief executive of Finicity, said in a statement.

Jack Henry’s toolkit is currently used by more than 400 financial institutions, including the $19 billion First Bank, TruStone Credit Union and the Neighborhood Credit Union. The integration will support open banking standards developed by the nonprofit industry group Financial Data Exchange (FDX), and Jack Henry announced Tuesday that it has joined FDX as a member.

Movement of data through standardized pipelines under an open banking ecosystem facilitates uniform and permissioned use of data and can supplement a customer’s financial profile, if they manage their holdings in different bank accounts. “Many consumers already benefit from data sharing without necessarily recognizing it as such. Any consumer already using Venmo or a variety of other popular P2P and fintech apps are already engaging in, and relying upon, the sharing of their data,” Lee Wetherington, senior director of strategy at Jack Henry, told Bank Automation News.

FDX’s data pipeline standards define more than 500 individual financial data elements, extracted from a variety of sources, including federal tax forms, account summaries, transaction data, and investment products like 401(k) and pension plans.

“We do not see the emergence of an alternative standard as either likely or as a threat,” Wetherington said. “Any defacto standardization of financial data-sharing that emerges, whether by industry consensus or regulatory mandate, will only serve to strengthen connections,” he added.

FDX has  186 members of which 55 are financial institutions or financial institution industry organizations. “

“If a new standard emerges, we will aggressively support it along with the associated platforms that utilize it,” Ben Metz, head of digital at Jack Henry, told BAN.

Earnings uptick

Jack Henry reported Monday that its revenues for Q1 2021 stood at $433.78 million, a slight year-over-year uptick of 0.93% from $429 million.

“During the quarter, we inked 15 competitive core takeaways, which is greater than the one-per-week run rate we saw in 2019,” Chief Executive David Foss said during the earnings call, noting that of the 15 deals, “five were with multibillion-dollar asset banks and credit unions.”

More than 400 financial institutions and 5 million users currently use Jack Henry’s Banno Digital platform and 12 customers are using its digital offerings for treasury management, according to the earnings presentation. This represents a key move toward digital for large commercial banks, Foss said. “You don’t install a treasury solution unless you have really large commercial customers. Otherwise, they just use cash management.”

Jack Henry’s [NASDAQ: JKHY] shares were trading at $157.82 at 4:30 PM on Wednesday, down 0.47% for the day. The technology provider has a market capitalization of $12 billion.

Updated on 5/6 to add comments from Jack Henry executives.