As large banks and FinTechs worldwide wrestle over data-sharing, JPMorgan Chase & Co has reportedly set a mid-summer deadline for FinTechs to ink new data access agreements. FinTech firms will be prevented from accessing client data by July 30, except if they ink the deals, Reuters reported Thursday (Feb. 13).
The bank reportedly made the deadline known in a letter sent to the firms late last month in which it said they have to agree to a plan to move toward a new way to client data. If not, the bank will prevent all automated access to the information, with the inclusion of a way of taking in data from one application for use in a different one known as screenscaping.
A spokesperson for the bank reportedly confirmed the letter’s contents and noted that it had agreements covering over 95 percent of asks for data access. FinTechs will not have the ability to use the passwords of clients to see all of their financial information with the new process of the bank.
But they will connect to an application programming interface (API), which provides access to only some account data for which the consumer has given permission. FinTech startups typically connect to the bank account of a user to collect the information they need to offer their services. Some retrieve the data via aggregators like Plaid, and other firms ask that a client supply a password.
In separate news, Visa recently inked a deal to buy FinTech firm Plaid for $5.3 billion. Plaid uses a unified API to connect FinTech apps with people’s bank accounts. The company has integrated with approximately 15,000 banks in Canada and the United States per a report in January.
Zach Perret, co-founder and CEO of Plaid, said in November per a past report, “We’ve been fortunate enough to be on the wave of FinTech, starting in the U.S.” Perret continued, “It’s had a lot of early success in the U.K., despite only being there six months.”