GUEST COLUMN.

In recent years, “open banking” – in which third-party financial service providers securely share consumers’ financial data, with their explicit consent – has taken hold in the finance sector. From applying for loans, to rent applications, to filing taxes, people are leveraging open banking infrastructure to navigate administrative processes with more speed and less hassle.

In a world in which our data is often bought and sold without our knowledge, open-banking and, with it, consent-based income verification, is an empowering reversal of the norm – users gain control of their data so that it can only be used when they want it, to their own benefit.

Could this same technology be adapted for government, making public benefits easier to navigate on the front end and resulting in more accurate, easy-to-process cases on the back end? So far that hasn’t been commonplace, but it has huge potential.

Currently, when applying for public benefits, state and local agencies are generally stuck in the same methods of verifying income as they have been for decades: asking customers to submit messy and oftentimes incorrect or incomplete documentation, while at the same time patching together third-party wage databases to identify any missing information on the back end. This process is manual, the data is lagging, and applicants are often stuck in backlogs with little reprieve.

For government services, consent-based income verification could

flip the script on these challenges. By linking to the accounts where their earnings show up, applicants can securely pass their income directly to a public benefits agency, bypassing the need to submit documentation and taking the guesswork out of applying. This can be especially valuable for applicants with complex income profiles, such as gig economy or self-employment earnings.

Similarly, for caseworkers responsible for verifying an applicant’s income, receiving one consolidated income report instead of disparate documentation could significantly streamline the eligibility determination process. Avoiding multiple “touches” and requests for information, this consolidation can short circuit the review process while simplifying the math to make a determination, ultimately reducing caseload work and backlogs.    

With all this potential then, why hasn’t consent-based verification established a foothold in government yet? One key barrier to entry is the longstanding friction around trust in public services. With only 22% of Americans reporting they trust the government to do what is right most or all the time (according to the latest survey data from the Pew Research Center), how do you build confidence among beneficiaries to log-into their accounts and share their income data directly with benefits agencies?

While consumers might be more comfortable with these kinds of platforms in the commercial space – think Venmo, Turbotax, or Cash App – it is a distinctly different ask when it comes to this same behavior in the context of government services. Open banking can empower individuals applying for benefits with their own data to streamline the enrollment process; but to do so, they must believe that they remain in the driver’s seat of how their data is used.

The first step in building trust is complete transparency. Agencies and their tech partners must clearly explain what data is being requested, why it’s needed, and how it will be used—using plain, simple language. Clear language builds confidence.

Second, the value of sharing must be tangible. For a working parent or someone juggling multiple jobs, the promise of “No paperwork. No uploading. Just connect your account and move on” is powerful—especially if the experience is quick, mobile-friendly, and clearly saves time. Trust cues in design matter, too. Security badges, recognizable open banking providers, and clear opt-out options reinforce that users are in control. Government branding and partnerships should also be front and center to show legitimacy.

Finally, educating users before the moment of consent is critical. A short explainer video or visual walkthrough can demystify the process and reduce fear. In an age of scams and surveillance, people need to understand what’s happening—and why—before they agree to share anything. To get this message right, consent-based verification products should consider public benefits recipients, alongside government agency staff, as end users and meaningfully get their input into user experience improvements.           

The barriers to a widespread adoption of an open banking infrastructure in the public sector are formidable - but the benefits are meaningful and scalable: cutting through the red tape of applying for government services and receiving critical supports, like food assistance, health care, and financial assistance, with greater speed and less friction, is a significant value add.

But what can be done in the private sector cannot just be copied and pasted into the public sector. With government distrust high, public benefit customers need to believe that these products are trustworthy, built with their security and privacy in mind. If platforms powered by open banking can earn that trust, they won’t just improve how benefits are delivered—they can open new doors to deeper trust in the government itself.

(Steady IQ provides many of the services described in this Guest Column.)

The contents of this Guest Column are those of the author, and not necessarily Barrett and Greene, Inc. 

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