JPMorgan Chase is looking to empower customers when it comes to the data they share with the third-party apps they love to use.
Jamie Dimon, the bank's CEO, explained on a fourth-quarter earning call how JPMorgan is working on controlling third-party applications' access to customer data with the eventual goal that clients can dictate what is and isn't shared.
"It's very important the data is the data the customer agrees to give them on the basis they agree to give it. It's not unlimited access to customer data. And the customer will have the ability turn it off," Dimon said. "As opposed to today, if you gave your bank passcode to someone they are taking your data every day, maybe even every minute, and you don't even know about it because you forgot."
Jennifer Piepszak, JPMorgan's chief financial officer, said on the call the bank is working on getting agreements from third-parties party apps to only access customer's information through the bank's own application programming interfaces (APIs).
"We hope through time that is exclusively the only way that third parties can access our customers' data," Piepszak said. "We think that's the most secure way to do it."
Piepszak said JPMorgan would be able to offer a tool to help users decide what they want to share.
"We're going to make it super easy for our customers to do that," Piepszak said. "You could imagine a dashboard."
Banks are in a tricky position, balancing their customers' desire to connect their accounts to the apps they so frequently use — everything from Uber to Robinhood — while also protecting the data that has become so valuable to the industry.
Earlier this month the Financial Times reported JPMorgan plans to stop allowing fintech apps to use its customers' passwords to gain entry into accounts. Instead, information would be distributed via tokens that could single out the information needed by the app and provide it in a secure form, as opposed to opening up a customer's entire account.
Providing a customer a dashboard to dictate which apps have access to what information appears to be the next step in that process.
The issue has long been a point of emphasis for Dimon, who wrote that customers allowing outside firms access to their bank accounts was something the bank was "extremely concerned" about in his 2016 shareholder letter.
"Far more information is taken than the third party needs in order to do its job," Dimon wrote. "Many third parties sell or trade information in a way customers may not understand, and the third parties, quite often, are doing it for their own economic benefit – not for the customer's benefit."
On Monday, Plaid, a startup that links financial apps to bank accounts, announced Visa intended to buy it for $5.3 billion. The San Francisco-based startup is one of the key players in the debate about customer data, as it serves over 11,000 banks and financial services companies and 2,600 fintech developers, serving as the cohesive glue between the two sides.
On a call announcing the deal Monday, Visa CEO and chairman Al Kelly acknowledged the potential for changes made to how Plaid works.
"We know there are financial institutions who would prefer Plaid operate differently in some cases," Kelly said. "We intend to address those concerns while not diminishing the value for developers, leveraging our global experience balancing a two-sided network."
Gordon Smith, co-president of JPMorgan Chase and CEO of consumer and community banking, was quoted supporting Visa's acquisition of Plaid in the release announcing the deal news, while again stressing the importance of data security.
