Data

With Plaid Exchange, financial institutions can accelerate digital transformation via APIs

  • Plaid is launching Exchange as its open finance offering.
  • With one integration, FIs can allow their customers to share their financial data with nearly 3000 fintech apps.
close

Email a Friend

With Plaid Exchange, financial institutions can accelerate digital transformation via APIs

Plaid’s Niko Karvounis, head of product, institutions, is one of our speakers at DataDay, the first-of-its-kind conference on financial data. Consumer data, data ecosystems, and data aggregation is changing the face of modern financial services. Join Niko and speakers from Wells Fargo, Fiserv, MX, Stash, p72, Nova Credit and more. Secure your spot.

COVID-19 caught some financial institutions unprepared to service their customers without access to branches. Transformation projects, slated for the future, had to occur in a matter of weeks.

Today, data firm Plaid is launching Plaid Exchange, an open finance platform for financial institutions to provide their customers data portability.

Plaid Exchange
Source: Plaid

Customers want to understand their financial health. For people with accounts at multiple banks, getting a full picture means aggregating and crunching their account data across financial institutions. The easiest way to do this is via APIs, which many banks lack the technology resources to create and integrate.

External APIs and partnerships should be considered as a means of accelerating innovation in open finance,” said Kieran Hines, senior banking analyst at Celent. “This requires banks to pay careful attention to the experience of both developers and the end-customer, as well having the appropriate frameworks, agreements and configurations in place.”

SPONSORED

Plaid Exchange gives banks and other financial institutions a token-based API solution that connects with the 2,600 apps on the Plaid network today. These institutions need to integrate once to the Plaid Exchange in order to get access to multiple data partners.

With Plaid’s newest product, banks can get to market in as little as 12 weeks, in comparison to a longer cycle if they were to build out API capabilities in-house. Implementing Plaid Exchange can also help FIs save on the costs associated with standing up an API, like building tools and programs to manage developer testing, implementation, and risk management.

Consumer permissioning is big theme in open finance, as institutions connect to more apps their customers are using. “At the heart of this platform is the ability for consumers to maintain control and transparency into where and how their financial information is permissioned and shared, increasingly important as more people rely on a variety of digital financial tools to manage their financial lives,” said Niko Karvounis, head of product, institutions at Plaid.

Within Plaid Exchange are tools that financial institutions can use to build consumer control centers. This gives end users visibility into where their data is being shared and the option to turn sharing on or off.

There are growing initiatives to standardize the sharing of financial data. The Financial Data Exchange, or FDX, has bank and fintech members working together to agree on policy. Plaid Exchange was designed to reflect some of these key principles around access, consumer control, transparency, and security.

To create Exchange, Plaid spoke with over a hundred financial institutions to understand their priorities. The company developed a solution that it believes encompasses what institutions need to implement an API data access strategy. 

“Building on innovation opportunities spurred by open banking, the broader concept of open finance is rising up the industry agenda. Banks that fail to take advantage are missing out on strategic growth opportunities,” said Celent’s Hines.

Plaid was acquired by Visa in early 2020 for $5.3 billion.

0 comments on “With Plaid Exchange, financial institutions can accelerate digital transformation via APIs”

Outlier OpinionsMakers

Data

Joining Chase and Wells Fargo, TD Bank joins Akoya financial data network

  • TD Bank’s customers will be able to securely provide access to their banking data to fintech apps and data aggregators using Akoya
  • This data is not copied or stored and is provided in a standard output based on the Financial Data Exchange’s API standard.
Subboh Jaffery | September 20, 2021
Data, Podcasts

‘Data aggregation is used today in ways we wouldn’t have thought about five years ago’: Fiserv’s Kevin Hughes

  • ​​As a bank software firm, Fiserv helps banks and credit unions aggregate data seamlessly and securely.
  • Kevin Hughes, who manages the AllData Connect product, talks to Tearsheet about changes in the aggregation field and where the it's heading.
Fiserv | September 09, 2021
Data

‘Leveling the playing field’: Could rent reporting pave a path to greater financial inclusion?

  • Timely rent payments aren't taken into consideration by credit bureaus, missing an opportunity to score thin- or no-file people.
  • Rent reporting could turn out to be a solution.
Rivka Abramson | July 22, 2021
Data

Cheat Sheet: White House pushes the CFPB to formalize consumer access and control over financial data

  • Executive order encourages the CFPB to issue regulations that put consumer data in the hands of the consumers.
  • The directive builds on existing legislation known as the Dodd-Frank Act of 2010.
Shehzil Zahid | July 13, 2021
Data

Download: Tearsheet’s 2021 Data Guide

  • Finacial data is the underpinning of the modern financial experience.
  • Tearsheet's 2021 Guide to Data explores trends and opportunities in financial data.
Tearsheet Editors | June 17, 2021
More Articles