Forestall monetary fraud, improve belief and make open banking a actuality with account tokens



Offered by Envestnet | Yodlee

Monetary fraud is rising as knowledge sharing turns into extra complicated. Stream this VB On-Demand occasion to learn the way fee processors can step in and take a stand towards knowledge breaches and dangerous actors, with extremely safe methods to retrieve, confirm, and share knowledge.

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Digital monetary purposes and providers, which supply handy methods for customers to pay for services, ship and obtain cash and handle investments, have change into the norm. However as digital interactions proliferate throughout the monetary ecosystem, regulatory compliance turns into extra essential as the danger of fraud grows exponentially.

Account verification is the crucial first step. Earlier than any transaction, a monetary providers firm should confirm that the funding supply is legitimate, that the account has sufficient funds, and that these funds belong to that buyer. Account verification, in lots of circumstances, exposes possession and financial institution particulars to the monetary providers firm. Given the required infrastructure and compliance wanted to handle and keep financial institution knowledge, account tokens function a extremely safe option to retrieve, confirm and share verified account knowledge.

“We’ve an obligation to guard buyer knowledge always,” says Lloyd Fernandes, VP, product administration at Envestnet | Yodlee. “That’s the reason the trade and firms should take into account adopting essentially the most safe account verification requirements.”

Why account tokens are crucial now

When a buyer logs right into a website or an app, they’re handing over extremely delicate knowledge to the fintech or the group that’s working the workflow, whether or not they’re opening an account or making a fee. The monetary providers firm will get entry to possession info, steadiness info and checking account knowledge like routing and account numbers.

“Verification is enhanced holder profile info,” Fernandes says. “AI- and ML-powered transactional analytics can moreover present derived details about a checking account that opens up higher strategies of account verifications and thereby newer income alternatives. All of which means account tokens are crucial, as a result of now that serves as a place to begin for a variety of completely different capabilities that account verifications will be the suitable resolution.”

The patron offers up that info in alternate for ease and comfort, like speedy log-ins and fast transactions — however in return, additionally expects that knowledge will likely be saved, used and transmitted securely and safely.

“That’s the place account tokens additionally play a giant function,” Fernandes says. “When delicate knowledge is at all times tokenized, from the time it’s sourced to the time it’s used, that token turns into the safe go-between from account verification to transaction. Solely the information wanted to confirm the funding supply is transmitted, the information is encrypted and the person’s credentials are securely managed all through your entire course of.”

The token-based authentication protocol eliminates friction, as a result of as soon as it verifies a person’s id and points a singular entry token, clients simply entry that service with out having to re-enter credentials each time. However tokens additionally supply a second layer of safety, and provides directors extra visibility into the person’s actions throughout the location, whereas nonetheless defending the person’s delicate knowledge.

Tokenization ensures {that a} buyer’s banking account and routing numbers are by no means transmitted together with a fee. It reduces the chance {that a} buyer’s account info will likely be saved with third events, like retailers, fintech apps and extra. And when a system is compromised, the token will be deactivated, making it ineffective.

Account tokens and the shift towards open banking

As we speak, customers are used to utilizing account tokens for his or her credit score and debit playing cards — for example, the tokenization framework that Apple Pay and Google Pay use, which makes paying a seamless faucet of the cellphone.

The banking sector has by no means actually embraced the concept of tokenization for real-time funds, however fintechs are embracing the answer, making authentication tokens extra frequent than ever earlier than. And now we’re additionally seeing the FedNow and THC real-time fee providers selling these safe tokens to maintain clients’ checking account numbers hidden from third events. That is steering the trade towards a standardized tokenization protocol, and is a big boon for a profitable open banking resolution.

Within the open banking framework, the token represents a client’s credential at a monetary establishment. A client can have any variety of tokens related to them, throughout a number of monetary establishments. With tokenization, open banking — which grants third-party entry to monetary knowledge by means of the usage of utility programming interfaces (APIs) — turns into far safer.

“Very quickly customers may have safe, totally tokenized wallets that forestall fraud,” Fernandes says. “Open banking protocols will likely be safer and simpler to implement than ever, making clients much more prone to embrace these options.”

To study extra about how authentication tokens are enhancing the methods monetary providers corporations serve their clients, how they’re combating fraud and what tokenization means or the way forward for the trade, entry this VB On-Demand occasion.

Begin streaming now.


  • Find out how account tokens work to scale back the danger of information theft
  • Shield delicate monetary knowledge from hackers and dangerous actors
  • Simplify complicated account verification processes
  • Remove the necessity to retailer delicate monetary account info
  • Put together for open banking and open finance alternatives


  • Jeff Williams, SVP of Product Improvement, The Clearing Home (TCH)
  • Ginny Chappell, EVP, Product & Advertising and marketing, Moov Monetary
  • Lloyd Fernandes, VP, Product Administration, Envestnet | Yodlee
  • Chris J. Preimesberger, Moderator, VentureBeat