As big banks get more protective over their customers' data, a key player facilitating the distribution of information said it's eager to help build in more controls.
Zach Perret, chief executive of Plaid, told Business Insider that the startup, which streams data between bank accounts and financial apps, fully supports banks' desire to have controls in place for their customers to manage access to their information, and in some cases is already collaborating with them.
Perret, whose company is set to be acquired by Visa for $5.3 billion in a deal announced in January, said the fintech has already worked with JPMorgan and Wells Fargo, two of the biggest consumer banks in the US, to allow their customers better management of access to their data.
"If a consumer has a connection to their bank account, they should know where it is. They should know how to rescind that connection. Turn it off. Stop sharing data with that app too," Perret said. "That's something that's incredibly important to us."
Plaid is a big believer in consumers having control over their financial life, Perret said. Customers should have a "toolkit" to manage connectivity to their data, which could exist in multiple areas, including potentially via Plaid itself, he added.
"At any point along the value chain, whether the consumer is interacting directly with the bank. They are interacting directly with the app. Or perhaps with Plaid along the way. They should be able to control who is accessing their financial data, what they are accessing it for and turn it off or turn it on as they need to," he said.
While concern over protection of consumer data has received increased attention in recent years, the topic has taken center stage in 2020. In early January, the Financial Times reported JPMorgan Chase's plans to stop allowing apps access to customers' bank accounts using their passwords, instead distributing data through secure tokens that would limit the amount of information provided to just what was needed.
A few weeks later during the bank's fourth-quarter earnings call, Jamie Dimon, JPMorgan Chase's CEO, and Jennifer Piepszak, the bank's chief financial officer, reiterated the firm's stance on not allowing financial apps carte blanche to view their customers' data.
Piepszak also briefly detailed a dashboard customers could use to control access to their data, something Perret said Plaid worked with the bank on.
Wells Fargo, which signed a data-share agreement with Plaid last September, has already built out a data management platform for its consumer and small business customers called Control Tower.
Control Tower, which was launched in 2018, gives its customers visibility into the different places their financial data is stored and gives them the ability to turn those connections on or off.
With the data-share agreement, Plaid-supported apps are included in the Control Tower.
"We know our customers want to use these apps," Ben Soccorsy, Wells Fargo's head of digital payments told Business Insider in September 2019. "We want to provide them with the best possible way to do that," he said.
On a call announcing the proposed acquisition of Plaid, Al Kelly, Visa's CEO, mentioned the payments giant knew "there are financial institutions who would prefer Plaid operate differently in some cases," adding "We intend to address those concerns."
And while Perret said Plaid's unique position — serving both banks and the financial apps they might consider competitors — led banks to question what role the startup would play initially, over the past year the two sides have worked together a lot.
"We've actually seen a new era of partnership with financial institutions in the past 12 months or so," Perret said. "I'm really confident we'll see greater collaboration between the banks and fintechs."
