JPMorgan Chase gives fintechs data access deal deadline
JPMorgan Chase has sent fintechs a letter warning that they will be cut off from retrieving customer information unless they sign up to a new data access agreement, according to Reuters.
The letter, sent in January, tells fintech firms that they must sign onto a "concrete plan" by July to move from methods such as screenscraping and using customer passwords to a new data collection method, says Reuters, citing sources.
The bank says that these methods are not secure and wants third parties to connect to an API that gives access to limited account data, decided by customers.
If firms do not agree, JPMorgan will block all automated access to the customer data, which is the lifeblood for many fintech firms and the data aggregators which serve them. Most firms have already agreed to JPMorgan's demands, says Reuters.
Unlike the UK, the US does not have a regulator-led open banking system, meaning that banks, data aggregators and third party fintechs have tussled over the best way to ensure customers can safely and simply share their information.
The financial stakes were demonstrated in January when Visa agreed to pay $5.3 billion for data aggregator Plaid, which promises to make the process easier for both sides by acting as a middle man.
However, even Plaid has run into problems in dealing with banks - last year it was locked out by PNC, leaving furious customers unable to connect their accounts to the Venmo app.