Navigating shared finance: customer authorisation

With the nascence of shared finance, Adam Rusbridge from Ping Identity, explains how identity and access management enable a safer and smoother UX.

Shared finance is a pervasive, complex use case for financial institutions that involve financial accounts owned, managed, and observed by multiple individuals. Examples include everything from a typical married couple’s joint checking account to parent-child finances or management of accounts for elderly relatives by proxy, to roommates pooling funds to share bills–with the most common being standard joint checking accounts and shared credit cards. Still, many shared finance use cases are less clear-cut, require granular access rules, and their durations vary, which all represent challenges for financial institutions.

Today, fintech firms hold the advantage in delivering shared finance products. They are innovative in shared services, providing excellent user experience while allowing individuals to reach shared financial goals with separate accounts. For example, the joint budgeting app Honeydue lets couples manage household expenses while providing space for individual solo expenses. Another example is the savings app Circle, which allows groups to save for common goals and fund them out of a shared wallet, permitting all types of user groups to contribute towards a shared goal.

Like many popular personal finance apps, these tools link to related online banks and operate independently. That means they rely on connections to financial accounts where money is stored. While these fintech tools are paving the way in shared finance, more traditional financial services providers have the potential to win over customers and offer innovative solutions to shared finance problems, whether by partnering with the fintech community or developing a solution in-house.

As shared finance use cases become more common, we must recognise that identity in finance is highly complex. An individual possesses only one identity but may have access to multiple accounts, with different permissions for each. One customer may simultaneously have access to a personal account and multiple shared accounts: a joint bank account with a significant other, delegated authority for an elderly parent’s account, and a business account for a small business. Retirement and investment accounts may also be in the mix. Some banks attempt to solve this challenge by creating separate identities for different contexts. Unfortunately, this is a poor solution that is difficult to manage.

Furthermore, customers want control. They expect excellent digital experiences because visiting a branch is cumbersome. They want self-service mechanisms to delegate access and manage account-sharing settings and consents.

From an Identity and Access Management perspective, different users are granted entitlements that confer specific permissions to different users: for example, giving a child permission to perform transactions up to a certain daily threshold but no further, or giving a family member permission to perform certain actions on an elderly parent’s account.

In effect, a customer can have access to multiple accounts, with different access arrangements for each. This means businesses need two core capabilities: first, visibility, consistency, and agility in managing permissions across every type of account, and second, flexible mechanisms for customers to make ad-hoc changes according to their specific needs.

It is the identity of the user that ties these requirements together. A strong identity and access management solution can provide many benefits to financial institutions, delivering smoother omnichannel customer experiences and providing a single view of the customer. But more importantly, identity can support digital interactions between a financial institution, its ecosystem of partners, and its customers.

If identity establishes who the user is, authorisation helps to control what that user can see and do inside the application–organisations need both. Identifying customers and unifying their experience across every channel and type of account is critically important, as it leads to higher levels of customer satisfaction, loyalty, and lifetime value. However, getting granular with permissions and entitlements is equally important when multiple types of accounts and shared finance scenarios are involved.

Shared finance is still a relatively new concept, and new use cases for different types of shared services are evolving, especially with an increased focus on financial wellness. Consumers want flexibility and control. While this presents a challenge for financial services organisations, it can also be an amazing opportunity to grow trust and loyalty.

By harnessing the power of authorisation, financial institutions can enable individuals to reach their financial goals. Building the infrastructure to support shared finance allows organisations to better respond to changing consumer needs, and Identity and Access Management solutions are key enablers for shared finance use cases.

Learn more about Ping Identity’s solutions for financial services organisations.

About Adam Rusbridge

Adam Rusbridge is a Senior Product Manager focused on Ping’s Authorization products, responsible for developing cutting-edge solutions that keep organisations and their resources safe and secure.

About Ping Identity

Ping Identity is the Intelligent Identity solution for the enterprise. We provide flexible identity solutions that accelerate digital business initiatives, delight customers, and secure the enterprise through multi-factor authentication, single sign-on, access management, fraud management, intelligent API security, directory, and data governance capabilities.