Unbanks is a Web3 company based in Ireland. We are building the world’s first consumer banking data union where users can sell their banking data (transaction history). Unbanks is launching soon (sign up for the waitlist here) and we wanted to answer an important question.
Why would anyone ever sell their banking data?
A fair question and the most common one we have heard. Throughout this article we will give our argument for why you should and explain our thinking behind the Unbanks concept.
At the end you may still wonder “Why would anyone ever sell their banking data?” and that’s fine, we know banking data is inherently personal (probably second only to medical data) and selling it may seem like a new or unusual concept.
As we describe the concept we hope that you see the merits and need for Unbanks. If not, we would love to hear your own opinions in the comments.
The article is divided into 4 sections, by the end we hope that the answer we have built convinces you.
- What happens to my banking data now?
- Why now?
- How is my privacy protected?
- What can I get for my banking data?
What happens to my banking data now?
Your data is almost certainly being sold on a data marketplace. Not all banks/card companies take part in this but many do. A quick Google search of “bank selling data <insert bank name>” or “<insert card company> selling data” will show you. There are 2 main ways this data is currently being sold;
- It is being sold from source
This means from your bank and/or card company. Your data is legally sold on data market places generally through a third party. They use third parties because they do not want it to be known they are selling the data, that would be bad PR. Banks/Card companies get your consent through terms and conditions forms (that you most likely did not read). This is how it is done unbeknownst to the majority of their customers. The data being sold is not the raw data, it’s anonymized (any personal identifiers are removed).
2. It is being sold by a company who you have granted access to your data
This means you have signed up for some form of financial app that requires you to allow them access to your bank accounts. Think bank account aggregation apps, credit rating apps etc. This is a classic example of “if you are not paying, you are the product”. These companies make money by selling your data (again the data sold is anonymized).
Why now?
It is the convergence of 4 factors that make selling your banking data now possible and beneficial.
> Data Unions and the Data Economy
The new Data economy is increasing in value every year. The EU is drafting legislation called the Digital Markets Act (DMA) which looks to regulate large corporations that possess significant control over enormous data sets. In this context that would be large banks and card companies. This presents a great opportunity for user led opt in data sets, think a kind of Fair-trade data. Enter Data Unions:
A Data Union provides a way to bundle a user’s data together with others and distribute a share of the revenue when someone pays to access it. On its own, a person’s data does not hold much value, but when combined in a data union, it can aggregate into an attractive product for buyers to extract insights.
The team at Streamr have built an secure and scalable Data Union platform which Unbanks will build on top of. This will allow Unbanks to send data (in real time) to the Unbanks Data Union leveraging Streamr decentralized network security. The Data Union platform also enables Unbanks to distribute payments to all users via the same decentralized secure network.
Data Unions are what allow Unbanks can organise the data, sell the data and pay its users.
> Open banking maturity
Open banking is the framework that allows you, the user, to share your banking data with whoever you choose to. Initially Unbanks will be operating in the EU and UK, in these regions the Open Banking legislation was introduced as part of the second Payment Services Directive (EU 2015/2366 PSD2) or PSD2 for short. In a nutshell this enables the use of open APIs that allow third-party developers to build applications and services around the financial institution. As PSD2 is EU (and UK*) legislation the banks must provide these APIs for third party companies to use. A user’s banking data can only be retrieved by a third party once the user has given explicit permission to that third party. PSD2 APIs are how Unbanks receives banking data from members of the Data Union.
*PSD2 was introduce pre-Brexit and hence has been mostly adopted by the UK post-Brexit
> Consumers willingness to share data for something in return
While the previous two factors were a combination of technology/legislation being built which allows new functionality, the third factor is very much a user behavior. Since there has been personal data the default action has been to keep it from view as much as possible. We believe that this should still be the case, however we also believe that if we can take the “personal” out of “personal data” then everybody has an opportunity to benefit from the data they create. This is what we are doing, we make your data completely anonymous so it contains only numbers and predefined values that cannot identify a user in any way. Privacy is our main concern.
Up until now it has not been possible to sell data in this friction-less, secure and anonymous way and there has not been a reason to. Now we can, with the first two factors mentioned Data Union/Data Economy and Open Banking it is possible and the users can get paid for it. As the option is now on the table we believe we will see users’ attitudes to data sharing and selling will change. Our job is to ensure and prove to the users over and over again the security and anonymity of the Unbanks platform.
How is my privacy protected?
As alluded to in the previous section privacy is of course the main concern. This is why, of the data Unbanks collects, we will only send 5 fields to the Data Union, each of which have predefined values or is a number. The fields are as follows;
{
timestamp: ‘must be in the format YYYY-MM-DD-T-HH:MM:SS’,
transaction_type: ‘can only be “CREDIT” or “DEBIT”’,
transaction_category: ‘one of 17 predefined values e.g “DIRECT DEBIT”,
amount: ‘must be an integer’,
currency: ‘must be a legitimate ISO 4217 alpha-3 currency code’
}
In addition to the data from your bank, Unbanks will add 2 extra fields — “Gender” and “Year of birth”. You will be asked for this information as part of the on-boarding (Gender can be left blank if you are not comfortable giving this information). An example of what we would send onto the data union;
{
timestamp: ‘2021–11–25T11:35:18Z’,
transaction_type: ‘DEBIT’,
transaction_category: ‘PURCHASE’,
amount: 4.20,
currency: ‘EUR’,
gender: ‘female’,
age_bracket: ‘30-33’
}
There will be no personally identifiable data sold, shared or sent to the Data Union. The data is completely anonymised, users are identified on the Unbanks platform only by their “sub_id” which is a 33 alphanumeric id for example ‘e14rf34e-05a1–4911-a2a1–52e638347ee2’.
It is paramount to us to communicate very clearly how we handle your data in Unbanks. We have found this to be the biggest concern for users and rightly so.
What can I get for my banking data?
Initially up to £4/€5 per month. As the Data Economy grows more companies will be looking for “Fairtrade Data”, the more buyers the more money you get.
As Unbanks matures we will offer other benefits (as well as cash) for being a member of the Data Union, vouchers, special offers etc.
Now, to come back and answer the question;
Q: Why would anyone ever sell their banking data?
A: Your banking data is already being sold but you do not see any benefit. The technology now exists that makes it possible to not only have control over your banking data but to also benefit from it. Your banking data can be sold completely anonymously to create a stream of income for you.
Banking transactional data is very sought after, it has been called the holy grail of data for marketers its one of the reasons Visa wanted to buy Plaid and in 2019 its where 1/4 of Mastercards revenue came from. The demand is growing but we want to make sure the people who create the data are the people who get paid for the data. Moving into the future we think Data will be treated as labour and everyone will be able to have a stream of income from their data. This is why we are building Unbanks and its why we believe users should consider selling their banking data on the Unbanks platform.
A bit about the Unbanks
Unbanks is a Web3 company based in Ireland. We are two people, Alan and Ger (cousins) operating out of Cork and Dublin. With a combined 25 years in Tech and Banking we have built the Unbanks platform and are excited to launch!
We have been working with Outlier Ventures to make Unbanks a reality.
The Unbanks platform is world’s first consumer banking data union where users can sell their banking data (transaction history). A users grants Unbanks permission to access their banking data through Open Banking (PSD2) and Unbanks periodically pulls the data from the banks APIs. The data is anonymised and sent to our Data Union. The Data Union will have hundreds of thousands of users providing data to it. Unbanks then sells access to the Data Union data to companies. Once the data is sold the users who provided the data will be paid. Unbanks will take a 15% admin fee.
You can sign up to the waitlist at https://www.unbanks.me/ also follow us on twitter or say hello@unbanks.me
