In JPMorgan’s Data Deal With Plaid, the Giants Cement Their Position
The agreement setting a price for customers’ financial information stands to benefit the biggest market players.
Online services have long had to contend with bot traffic, and your banking app is no exception. While most of us log on to our apps an average of two times every three days (at least according to Bank of America Corp. data), electronic intermediaries that pull data on behalf of third-party services are a lot more aggressive. “Aggregators are accessing customer data multiple times daily, even when the customer is not actively using the app,” a JPMorgan Chase & Co. systems employee wrote in a July memo. “These access requests are massively taxing our systems.”
The JPMorgan memo refers to services provided by platforms such as Plaid Inc., MX and Mastercard Inc.’s Finicity. With customers’ pre-approval, they connect bank accounts to apps offering cash-flow monitoring, payment authentication and other services that rely on individuals’ financial data. Yet in many cases, their demand for information goes beyond a user’s immediate needs. JPMorgan reveals that it was hit with 1.89 billion third-party requests in June, of which only 13% were initiated by a customer – the rest were reportedly to help app developers improve their products or prevent fraud.