JPMorgan sets deadline for fintechs to sign data access deals
Friday, 02 14 2020, Category: Banking, Country: United States
JPMorgan Chase & Co has told financial technology companies they will be barred from accessing its customer information by July 30 unless they sign data access agreements with the bank and back a plan to stop using customer passwords to gather the data.
The largest U.S. bank by assets set the new deadline in a letter sent to the companies in late January, in which it said they must agree to a “concrete plan” to transition to a new method of collecting customer data, according to two people familiar with the matter.
Otherwise, JPMorgan will block all automated access to the data, including through so-called screenscraping, or the process of collecting data from one application to use it in another, the people said.
A JPMorgan spokesman confirmed the contents of the letter and said the company already had agreements covering more than 95% of data access requests.
The deadline is the latest move in the bank’s effort to transition fintechs and data aggregators to what it has said is a more secure way of accessing customer data.
Fintech startups, such as those that offer budgeting apps or digital wealth management, usually connect to a user’s bank account to gather the necessary data to provide their services. Some gather the data through aggregators such as Yodlee and Plaid, which is in the process of being acquired by Visa Inc (V.N), while others request that customers provide their password.
Through JPMorgan’s new method, fintechs will not be able to use customers’ passwords to access their entire financial data, but will instead connect to a set of bank programming code known as an API, that grants access only to limited account information authorized by the consumer.