Know the risks of giving money-management apps access to your banking information
Is it safe to share your data with financial apps?
Budgeting and money-management apps and websites are incredibly convenient: they can help you track spending, save and invest, send money to friends and family, pay bills and taxes or just give you a single snapshot of your entire financial picture. However, the ways in which some services collect—and store—sensitive data like your online bank account username, passcode and transaction history could put your personal information at risk.
It’s important to understand how using apps that access your financial accounts—usually through a separate, third-party data aggregator—can increase the risk of data breaches and the ways you can protect your personal information.
What is a data aggregator?
When you use a financial app, you’re usually asked for personal data and banking log-in information so that the app can gather your information to provide its service.
Data aggregators are third-party services that work in the background to supply the app with the specific banking data needed to perform the app’s functions.
The information collected could include a variety of information from your bank or financial institution—accounts, transactions, balances, statements and personal details.
How is data collected?
Are there risks to sharing account information?
Are there more secure ways to share your account information with a data aggregator?
Many banks are using more secure ways to provide your account information to financial apps. As these new protocols—often called an application programming interface, or API—become available, the need for third parties to store and use your sign-in credentials will be eliminated, and consumers will have more control and transparency over the data being shared. Your financial institution may also offer an online dashboard where you can revoke your permission for any third party to access your account information.
What happens if there is a third-party security or data breach?
If you’ve been affected by a data breach, immediately reset your passcodes. Check to see if your information has been compromised by watching for notification from your bank, often by letter or email. You can also get free credit reports from the three major credit reporting agencies. Contact your banking institution to ask about any information that’s being shared with another party.
4 ways to protect your information
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