Delaware warns investors about risks of financial data aggregators

A state agency gives tips to Delawareans hoping to keep their financial data safe and secure. (Photo by nespix/iStock Getty Images)

The Delaware Department of Justice’s Investor Protection Unit is urging investors to proceed with caution when using financial data aggregators and third-party financial platforms.

Officials warn that while these tools can offer convenience and a comprehensive view of one’s finances, they also pose significant privacy and security risks.

Financial data aggregators—digital services that compile a user’s financial data from various institutions—are increasingly being used by financial professionals to provide clients with a centralized dashboard of their investments, bank accounts, insurance, and even mortgage details.

Some platforms also offer budgeting tools, financial planning, and tax advice.

But officials say users must be vigilant about how their data is accessed, stored, and used.

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Before sharing sensitive financial information, it’s important for investors to understand the terms and risks involved, officials state.

These services may require access to bank credentials and could facilitate trades or withdrawals on a person’s behalf.

The department highlights two common methods aggregators use to access financial data: “screen scraping,” where the aggregator logs into a user’s account using their credentials, and APIs (application programming interfaces), which allow data to be shared without sharing login information.

The agency advises consumers to:

Read all user agreements carefully to understand what rights are being granted.
Ask what security and privacy measures are in place.
Be cautious about granting access that could enable transactions or withdrawals.
Investigate the platform’s history, including complaints or lawsuits.
Understand the liability and dispute resolution processes in the event of a data breach.

Users are also encouraged to verify whether the aggregator stores login credentials, whether secondary users can access funds, and what happens if financial losses occur as a result of unauthorized access.

The department reminds investors to revoke access and delete accounts with aggregators once they are no longer in use.

For more information on data aggregation and how to safeguard your financial information, the Department encourages investors to visit its website.