Prepare your institution for Open Banking using Tokenized Account Numbers
Will you be ready for the new CFPB Section 1033 requiring you to share your customer's personal financial data - including for payment initiation?
Tokenized Account Numbers (TAN) from VGS enable banks and financial institutions to share bank account numbers securely.
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The CFPB has proposed a new section 1033 of the Dodd-Frank Act on personal financial data rights. The rule would require financial institutions and data providers to make a consumer's financial information available to the consumer or to an authorized third party.
Why was this rule introduced?
CFPB aims to create fair industry standards. When passed, this rule will make it easier for consumers to gain access to their financial information and share it across their favorite banking apps with a simple identifier, like an email address or phone number. The ease of sharing data between institutions will make it easier for consumers to have a full picture of their financial data.
Consumers can share transaction data across accounts like checking and savings accounts, prepaid cards, credit cards, and digital wallets that best meet their personal criteria for rates and services.
As a bank or financial institution, CFPB rules will require you to share sensitive bank account data with consumers and their authorized third-parties. All those participating or facilitating bank data sharing will need to protect your customer information and business reputation when you do.
Tokenized Account Numbers are the safest and most secure way to comply.
Will you be ready in time? Once passed, major banks will need to be ready within 12 months.
Tokenized Account Numbers
Tokenized Account Numbers enable you to share your customers' sensitive financial information while protecting them and your business. Having a bank account number (or DDA) in the raw would put your customers' data and your business at risk. Tokenized Account Numbers (TANs) from VGS can fill the gap.
Secure
Tokenized Account Numbers (TANs) enable you to turn account and routing numbers into a token - a randomized series of numbers that preserves the same format.
Instead of using the account number for debit (ACH, RTP) or credit transactions, or other data-sharing needs, you would use a TAN.
With TANs, you can meet your data-sharing requirements while reducing the risk of compromising your customer's information.
Unique & Merchant Specific
Tokenized Account Numbers (TANs) should be merchant-specific. This means that if one merchant is compromised, you can shut off just that token.
You can track any compromised data back to a single source, and don't need to replace the underlying DDA.
This extra layer of security provides a better customer experience and provides stronger protection.
Interoperable
As a bank or processor, you'll want a repeatable process and scalable product across all consumer and third-party needs, so you don't need to duplicate efforts with each new request.
As new rules come into play, banks will create their own tokens. However, these will work only with a single provider, necessitating an interoperable token translation layer.
VGS Tokenized Account Numbers (TANs) work across the payments ecosystem of banks, data aggregators, and third-parties.
As a universal token and vault provider, we've tokenized billions of sensitive payment records and have substantial experience transmitting tokenized data required for payments.
Our approach lets you quickly swap between tokenized and non-tokenized data forms based on who is interacting with the data. This lets you maintain control of your account information.
Implementation Ease
CFPB Section 1033 states that financial firms (or data providers) must set up secure APIs with clear, standardized documentation and guarantee 99.5% uptime.
VGS Tokenized Account Numbers (TANs) meet these requirements and more, and you can go live within days.
Conclusion
Given the global industry shift to open banking and consumer choice, it is very likely the new CFPB rule - Section 1033 of the Dodd-Frank Act - will become the new reality in the US. We are here to help you comply with the CFPB rules while keeping your data safe.
Tokenized Account Numbers (TANs) from VGS
Keeps your information secure
Ensures you stay compliant with the CFPB
Gives you interoperable, merchant-specific bank account tokens