JPMorgan Chase and Envestnet | Yodlee have signed a data sharing agreement providing a framework for the bank’s customers to share and use their personal financial information to make better informed financial decisions.
What’s happening: As a result of this agreement, millions of Chase customers will be able to send their financial information to more than 1200 third-party apps on the Envestnet | Yodlee platform.
- The core elements of this new agreement include better privacy and security controls, connectivity, and reliability, according to Envestnet | Yodlee CEO Stuart DePina.
- Chase customers previously needed to provide personal credentials to aggregate data from third party apps. Those credentials were retained on the website and app. Now, that goes away, similar to how single sign-on works.
- “This will help our customers manage exactly who they give their information to, and understand how their information will be used,” said Bill Wallace, head of Digital at Chase. “They also can cancel that access anytime they want.”
Envestnet | Yodlee moving ahead: Envestnet | Yodlee has 20 years experience aggregating data in the financial services industry. The firm is working to leverage its industry relationships as it prepares for the future.
- “For the past 18 months, we’ve dug in deep thinking about how to enable clients — both FIs and fintechs — to better deliver greater financial insights to their consumers,” said DePina.
Data as currency: Consumers want more guidance from their financial institutions and they want their bank accounts to talk to their fintech apps.
- As the data aggregation industry matures, it’s moving away from aggregating data via screen scraping.
- This deal with Chase and Envestnet | Yodlee uses APIs specifically designed to decrease latency, improve transparency, and simplify the registration process.
- There’s also a data and analytics layer that Envestnet | Yodlee can feed back to Chase by enriching its data. If enabled, this could give Chase insights into its consumers, their profitability, and how to better support them.
- The data aggregator is also developing some new analytical tools that benefit the end user. “By using the residue of consumer data, we can benefit the end user, so they can do things like understand and manage duplicate and legacy expenses,” said DePina.
Working with fintechs: This is the second major data sharing agreement within the last six months for Envestnet | Yodlee.
- Envestnet | Yodlee signed a deal with Citi earlier in 2019, but that didn’t include the technical improvements included in the new Chase deal.
- The firm is working on several of these next generation with large FIs.
“We think financial institutions have been looking for capabilities to elevate their value propositions,” said DePina.
“We’re seeing a greater number of firms like Chase leverage providers like us to meet the needs of their customers. This marks a shift from institutions doing it themselves to turning to third parties. The marketplace is recognizing that investments in fintech are starting to pay off.