JPMorgan Chase & Co. has inked a data sharing deal with Plaid Inc., the FinTech that connects banks with financial technology applications.
Bloomberg, citing the companies, reported that under the deal, Plaid Inc. will let customers more easily send banking data to third-party apps for managing their finances. Plaid Inc. will be able to access JPMorgan customer data via its application programming interface (API) without storing usernames and passwords.
The deal is an about-face for JPMorgan Chief Executive Jamie Dimon, who has contended that FinTechs will try to ascertain more data than they need and will continue to access it after the customers stop using the app, reported Bloomberg. To address those concerns, customers can see the FinTechs that can collect data on JPMorgan's website and mobile app. In the future, customers will be able to block the access, noted the report.
“This represents a major evolution in the way Chase thinks about working with FinTech,” Plaid Inc. CEO Zach Perret said in a telephone interview. “This agreement is a really big step forward from one of the largest banks in the country saying FinTech is a really good thing for the consumer and they want to support it."
With Plaid Inc., consumers can share data with Betterment, PayPal's Venmo and Coinbase, among others. With the data sharing, those services can see the bank balances and authenticate the accounts. The deal between JPMorgan and Plaid Inc. is seen as a data access compromise by a traditional bank and a FinTech.
“Customers can see who is using their data and how, and they can also control it,” Paul LaRusso, JPMorgan’s head of digital data sharing and aggregation, said in a telephone interview with Bloomberg. “It achieves the goal of giving customers a way to safely share their data with third-party apps.”