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In the first webinar of our Open Banking Compliance series, “1033 Compliance is a Significant and Ongoing Expense. Don’t Underestimate It”, Open Banking experts from Akoya and Capgemini shared some hard-learned lessons from their experiences, both in the US and globally, and explored just how big of a lift compliance will be for most financial institutions.
The Challenge Facing Financial Institutions
As regulatory pressures mount, financial institutions are facing one of their most critical challenges yet: CFPB Section 1033 compliance. With the focus on data transparency, customer access, and ongoing management, the road ahead is complex—and financial institutions need to prepare now to meet these obligations head-on.
What does it take to stand up the technology, policies, and procedures for Section 1033 compliance? How can institutions like banks and credit unions manage third-party risk to ensure compliance isn’t just achieved but maintained for the long haul?
On-demand webinar
The Road to CFPB Section 1033 Compliance: What’s Involved?
So, what does the journey to compliance with Section 1033 look like for financial institutions? It all boils down to three critical requirements: technology, policy and procedures, and third-party risk management.
Technology Infrastructure
One of the first steps is ensuring your institution has the right technology in place. This involves updating your data-sharing infrastructure to provide customers with secure and seamless access to their financial information.
The tricky part? Many financial institutions are operating on legacy systems that weren’t built for this level of data transparency mandated by Section 1033. Upgrading those systems can be costly and time-consuming.
However, without modern technology, maintaining compliance will be almost impossible, and attempting to patch together old systems might create security gaps—leaving the door wide open to data breaches.
Consider:
- Is your current technology infrastructure capable of handling secure data access requests?
- How will your financial institution handle real-time data sharing while maintaining security?
- What investments in IT or new technology are needed to be fully compliant?
Policy and Procedure Overhauls
Institutions will need clear guidelines for managing consumer data access requests while safeguarding sensitive information. This requires setting up procedures that not only meet today’s requirements but are also flexible enough to adapt as the regulatory landscape continues to evolve.
Institutions need to strike a balance between transparency and security. This means having clear, easy-to-follow processes for customers, while ensuring internal teams understand how to protect data from potential threats. Training staff and creating a culture of compliance are just as important as the technology behind it all.
Consider:
- Are your current data governance policies aligned with Section 1033’s requirements?
- Have you reviewed your data-sharing policies recently?
- How will you ensure that both front-line and back-office staff are up to date on compliance protocols?
Third-Party Risk Management
Finally, third-party risk management is one of the most critical pieces of the compliance puzzle. These relationships with third-party data recipients such as fintechs and data aggregators also introduce additional risk.
To maintain compliance, institutions must develop comprehensive third-party risk management strategies. This includes performing due diligence on data recipients, ensuring they’re equipped to handle sensitive data responsibly, and continuously monitoring their compliance status.
Consider:
- Are your third-party data recipients compliant with Section 1033 requirements?
- What processes are in place to monitor third-party compliance on an ongoing basis?
- How will your institution address third-party-related risks if they arise?
Why CFPB Section 1033 Compliance Is a Long-Term Commitment
Meeting the initial requirements for Section 1033 is just the beginning. Maintaining compliance will require ongoing effort, especially as the regulatory landscape evolve and new threats to data security emerge. For financial institutions, this means regularly reviewing and updating technology systems, adjusting policies and procedures, and keeping a close eye on third-party data recipients.
The complexity of compliance is further compounded by the fact that Section 1033 compliance is not a one-size-fits-all solution. What works for a small credit union may not be appropriate for a large regional bank, and vice versa. Each institution will need to develop a tailored compliance strategy that meets its specific needs, customers, and technology infrastructure.
How Akoya Can Help
At Akoya, we understand the challenges financial institutions face as they navigate Section 1033 compliance. Our 1033 Compliance Solution is specifically designed to help financial institutions, including banks and credit unions securely manage consumer data access requests while ensuring third-party risk is minimized.
But compliance is more than just technology—it’s about readiness. That’s why we’ve developed a Financial Institution Readiness Worksheet to guide institutions through every step of the compliance process, from technology upgrades to third-party management.
CFPB 1033 Readiness Worksheet
This comprehensive resource can help you assess your current state of compliance and identify areas where improvements are needed.
The Time to Prepare is Now
Section 1033 compliance is rapidly approaching, and the longer financial institutions wait, the harder it will be to catch up. With the right technology, policies, and third-party risk management strategies in place, compliance doesn’t have to be a burden—it can even be an opportunity to strengthen relationships with customers and build a more secure, future-proof operation.
By understanding the complexities of Section 1033 compliance now, financial institutions can stay ahead of the curve, avoid costly missteps, and ultimately protect both their operations and their customers’ trust. The time to act is now—don’t get left behind.
To stay ahead of 1033 compliance best practices, don't forget to register for upcoming webinars in the Open Banking Compliance Series presented by Akoya and Capgemini.
