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‘A Cambrian explosion of products and services’: The rising importance of payroll data with Plaid’s Ben White

  • Data aggregation is the underpinning of the modern financial experience.
  • The industry's focus is moving to payroll data to get a fuller picture of a consumer's financial life.
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‘A Cambrian explosion of products and services’: The rising importance of payroll data with Plaid’s Ben White

The first era of next generation financial companies focused on the bank account as the store of information and value for consumers’ and business’ financial lives.

That’s changing, as fintechs and data aggregators go deeper into payroll data and payments. The topic is becoming more urgent since the PPP rollout earlier this year.

Ben White from Plaid’s policy team has recently authored a report on the value of payroll data and he joins me on the podcast to discuss what payroll data access is, why it matters, and the opportunity it presents for future fintech innovation.

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The following excerpts were edited for clarity.

Opening up payroll data

It’s interesting to think about these developments as sort of a time lag behind where the banking sector itself has moved. In 2018, 80% of payroll providers offered an online portal, which is sort of a precursor to data connectivity. The legacy method of providing consumers access to their data was giving them a downloadable PDF statement.

But the reason that 80% number is so fascinating is because 80% of banks offered online banking in 2006. So, 12 years later, the payroll industry had reached the same level of online offerings that the banking industry had reached. That’s pretty good penetration.

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Now that that infrastructure has been built, there is the opportunity for companies like Plaid to step in and say, okay, you’re providing consumers this access to their data on a one-off basis. How can we layer on top of that, using the models that we built in the banking sector, to give them the sort of data connectivity that can allow them access to the full suite of fintech products and services?


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