SEATTLE — Embedded finance adoption is highlighting the importance of responsible data usage for banks and fintechs.

As demand for real-time payments surges, customers must be assured that sensitive information is secure and their financial institution is transparent in how it treats customer data, Paul Margarites, head of commercial digital platforms at TD Bank, said Monday during the panel “Embedded Finance: Frontiers in Open Banking” at Bank Automation Summit Fall 2022 in Seattle.

“No matter what we’re thinking, in terms of consideration, the end result is the client impact and how they are impacted by that decision,” Margarites said. “Delivering API connections, for instance, and sharing information with the client — there’s a wealth of information clients hold on their side. But if they’re going to share it with a bank, or a financial institution, there needs to be a reason.”

Executives from TD Bank, Grasshopper Bank, Citi Treasury and Endava shared their perspectives on regulation in the banking industry during the panel discussion, with the main theme being the difference between regulation in the U.S. versus other parts of the world, and providing a similar experience to users globally.

“We’re a global bank, we need to have the capability to adapt, and I think the real challenge is how you adapt the same solution and give your client a similar experience,” said Mohit Narula, global head of connectivity product, platforms and data services at Citi Treasury.

Customer risk tolerance

There are inherent security risks posed by the exchange of personal information between banks and their customers, but panelists noted the vast difference between sharing an individual’s data versus data shared in a professional setting.

Customers tend to side with “convenience over security” and typically prefer to move quickly, which “cannot be done in work settings,” Zoya Lieberman, senior industry consultant at Endava, said during the panel discussion.

Narula agreed, noting that he would be more inclined to take a risk with personal sensitive information than as treasurer of a company.

“In my day-to-day life, I might take risks, which I don’t even bother about, because I need that work to be done immediately,” Narula said. “I’ll do whatever I need to do to get that money across to you in five minutes. Because I’m responsible for the risk I’m taking on behalf of my job, which is a professional obligation versus a personal one.”