Envestnet’s CEO advocates for federal standard on data privacy

Tech giant Envestnet is working directly with Capitol Hill in an effort to bring transparency to its data aggregator which, in turn, could enable a federal standard for data privacy laws, company CEO Bill Crager said during the CB Insights Future of Fintech conference Monday

Envestnet’s business supports $4.1 trillion in assets in approximately 13 million investor accounts, according to the fintech’s third quarter earnings. On top of that, Envestnet’s data infrastructure has 17,000 data sources, 450 million linked consumer accounts and more than 33 million users as of the third quarter. 

That sheer size and scale of Envestnet’s business has garnered attention from Congress, lawmakers, and consumers expressing concerns about the potential for consumers’ personal data to be compromised. Envestnet and its subsidiary, financial data aggregator Yodlee, was slapped with a data security lawsuit in August

However, Crager is hopeful that once regulators can understand how Envestnet and its subsidiaries use and store consumer data, then they can work together to build a federal standard. 

“Data creates a living environment for individuals to understand their financial lives better, and the key to data privacy is to be very transparent about the use of data, how that data may be reused, and understanding the security and protection around the data,” Crager said. “We’ve been in Washington, spending a lot of time there with legislators and regulators helping them understand the data use.” 

The biggest problem the industry is facing is that there is no federal standard for data security, Crager said. For Envestnet Yodlee, the firm complies with the California Consumer Privacy Act calling it the “most progrssive legislation,” Crager said.

Crager is also confident that regulators under a Biden administration will drive that standardization of data privacy laws, he said. Having more clear and standardized laws around protecting consumers’ data would also help drive Envestnet’s broader business strategy around financial wellness, Crager said. 

“Overall, one of the key quality-of-life issues in the American household, felt loud and clear during the election, is the issue of the economy and finances,” Crager said. “Creating greater financial awareness and stability, ultimately drives towards this concept that we talk a lot about — financial wellness.” 

Notably, Envestnet is working to provide more financial planning tools for free to bring some of the same technologies it uses with high-net-worth clients downstream to a marketplace that hasn’t been addressed in the past, Crager said. “Data and software have a reach beyond any neighborhood,” he said. 

In that light, Envestnet MoneyGuide began offering its digital financial planning tool — MyBlocks — complimentary for consumers to access planning solutions via their adviser. The tool was launched in 2019, but Envestnet started offering the tool for free in April amid the pandemic. 

Envestnet has risen to become one of the largest TAMPS in large part because of its acquisition of Yodlee. Other major acquisitions — including Tamarac and MoneyGuidePro — have been at the center of Envestnet’s expansive growth over the past decade.

The post Envestnet’s CEO advocates for federal standard on data privacy appeared first on InvestmentNews.

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