The new version of the FDX API seeks to add more functionality to the fintech and financial institution ecosystem, including new requirements for Certification by Data Recipients, management of payment initiation for users, and updated data for tax returns. The update reportedly aligns with other global standards such as the Open ID Foundation’s Financial-grade API (FAPI) security standard and the insurance industry’s ACORD annuity standards to promote greater interoperability and industry adoption, as stated by the official press release.
Following the update, FDX API 5.2 is designed to:
clarify ‘must’ versus ‘should’ language;
include new requirements for Certification by Data Recipients. Data recipients are fintech apps that interact with financial Institutions.
manage payment initiation for users.
Besides this, the updated API now includes a prescribed user journey in the UX Guidelines for setting up and consenting to payment functionality. For tax filing, this update enables the inclusion of data needed for IRS Filing Information Returns Electronically (FIRE), the press release continues.
Many of these updates seek to provide more specific information to be included when sharing data and standardises the enumeration structure for developers. Moreover, the FDX UX Guidelines reportedly clarify to implementers what they must and should display to the end user. These guidelines detail the consent journey and how to edit or revoke consent through dashboards that implementers must provide.
According to FDX Managing Director Don Cardinal, with the new update, the FDX API has reportedly already surpassed the level of a robust API fit for purpose for the Open Banking ecosystem. He continued to say that ‘the additions and refinements in 5.2 were very targeted and specific, giving evidence that the core Open Banking features appear to be complete’.
The FDX API updates are based on the work of FDX’s global financial industry membership across more than 30 different technical working groups and task forces to identify and develop improvements and updates to FDX standards to meet market needs. FDX API 5.2 is free to access and use subject to the terms of the FDX API Licence Agreement. FDX members can access all documentation regarding FDX API 5.2 through the FDX member Confluence page, the press release states.
FDX recently reported that 42 million consumer accounts currently use the API for financial data sharing in the U.S. and Canada. In January 2022, there were 28 million consumer accounts using the FDX API. FDX releases updates to its API twice a year, with significant updates delineated by whole version numbers.
Financial Data Exchange is a non-profit organisation operating in the US and Canada. FDX is dedicated to unifying the financial industry around a common, interoperable, royalty-free standard for secure and convenient consumer and business access to their financial data, as stated by the company.
The Paypers interviewed Don Cardinal for the Open Banking/Open Finance Report 2022. The Managing Director at FDX talked about the progress made by Open Banking in the US, how it managed to develop into Open Finance, and more. To read the whole interview, we encourage you to download the report.
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