JPMorgan announces partnership with Plaid

JPMorgan CEO Jamie
Dimon.
AP Images

• JPMorgan signed an agreement with financial technology
  company Plaid that will give its customers better
  control over their personal data. 
• Plaid connects bank accounts with fintech apps like
  Robinhood, Venmo and Acorns. 
• The deal marks an important development in how JPMorgan
  is thinking about fintech companies and the financial data they
  touch. 

JPMorgan on Monday signed an agreement with Plaid, a technology
company that connects bank accounts with fintech apps like
Robinhood, Venmo, and Acorns, that will give its
customers better control over their personal data. 

Plaid will access JPMorgan’s customer data
through
 a secure application programming
interface or API, allowing customers to share their financial
information more easily and safely. Banks including JPMorgan have
pushed back against so-called screen scraping, another way for
fintech apps to companies to access customer data that generally
is viewed as less secure. 

“This is an important milestone
between JPMorgan Chase and Plaid because it reinforces some of
the principals around customer control and security,” said Paul
Larusso, JPMorgan’s head of Digital Data Sharing and Aggregation.
“It reinforces the principle in the industry that data should be
securely transmitted through API, and not through
screen-scraping.”

The agreement facilitates a
feature on Chase’s bank account, dubbed “Account Safe,” that
allows Chase customers to see which applications are using their
data. Customers can then decide whether they want to share the
data with external apps.

JPMorgan CEO Jamie Dimon has
previously said that fintech companies that aggregate financial
data present risks to consumers because of the amount of private
data they collect. But since then, the bank has struck agreements
with several other data aggregators in the last few years
including Intuit and Finicity. 

The deal with Plaid
reemphasizes those themes that Dimon has been vocal on and
helps the bank to provide customers with a safer and more secure
way to transmit their personal information, Larusso
said. 

The announcement with Plaid also comes as the company is meeting
with potential investors about raising money that could value the
firm at more than $2 billion, Business Insider previously
reported.