Telis Demos reported in yesterday’s Wall Street Journal that, “Plaid Technologies Inc., whose software allows a variety of financial-technology startups to access their customers’ bank account information, has raised $44 million in a new round led by a fund at Goldman Sachs Group Inc.
“The new funding is a boost for apps and websites that use Plaid, which has now raised about $60 million total, as they work to ensure access to customer data held by banks.”
The Journal article explained that, “In recent months, banks and fintech firms have clashed about some of the ways that the firms access bank-customer account data, including concerns about security of passwords and surges of data traffic to banks’ websites.
“Many upstart financial-services providers such as online financial adviser Betterment Inc. use Plaid’s software to access or check customers’ account data when providing mobile and web services like budgeting, investing or lending.”
Yesterday’s article added that, “Industry discussions include potential agreements about how and when data aggregators can access customer information, and through what means. Part of the discussion is about making it clear what data customers want to share, and about how customer account passwords should be stored.
“Last year, banks including J.P. Morgan Chase & Co. briefly restricted access from a service by Mint, a unit of Intuit Inc. that allows customers to gather all their financial accounts on one site, after the banks said it was overwhelming their websites with data traffic, the Journal has previously reported. A spokeswoman for Intuit declined to comment.
“That incident prompted a wave of discussion among fintech firms, banks and regulators. Fintech upstarts, which often offer services that compete with banks, have said that bank data should be free for customers to share. Banks have said that they only want to make sure customer data are secure and that their servers aren’t overwhelmed.”
