By combining Plaid’s data network that connects financial accounts to apps and services with Okta’s identity solutions that enable secure access, the collaboration will make it easier for financial institutions to exchange data with third parties via OAuth and application programming interfaces (APIs), the companies said in a Tuesday (Feb. 14) press release.
OAuth is an industry-standard protocol for authorization that gives users more control over how their data is shared, and these methods create better and more secure experiences for consumers as they do not require passwords to be exchanged, according to the press release.
“This is a win-win for consumers who expect privacy and choice in the ways they manage their financial accounts for things like payments, budgeting and investing,” Plaid Financial Access Partnerships Aly Yarris said in the release.
While consumers crave the convenience of the connected economy, they still want to know that their money is safe.
PYMNTS research has found that 59% of consumers say trust in a financial institution’s ability to protect their assets is important when sharing bank account credentials with third parties, according to “Convenience + Security: Key Consumer Findings on Third-Party Financial Data Aggregation,” a PYMNTS and MX collaboration.
The report found that the “anytime, anywhere” convenience of new technologies and payment methods relies significantly on consumers’ willingness to share their bank account credentials with third parties — and while many are willing to do so, others are more concerned about using third-party apps that connect to their accounts.
The new partnership between Plaid and Okta is meant to do that by supporting financial services companies as they adopt OAuth integrations and API-based data connectivity solutions, according to the release.
“With Okta’s independent and neutral platform, financial services companies can embrace identity best practices regardless of their technology stack, and pass the security and experience benefits onto their consumers,” Okta Vice President of Technology Partnerships Maureen Little said in the release. “We are thrilled to partner with Plaid to elevate the importance of identity across the financial services ecosystem.”