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The journey from screen scraping consumer financial data to API, permissioned access continues. U.S. Bank recently announced a partnership with technology partner, Plaid.
Gareth Gaston from U.S. Bank and Ginger Baker from Plaid join us to talk about the recently announced integration between the two around consumer financial data. We discuss the nature of the integration and why it’s significant. Both Ginger and Gareth describe the relevance of the US Bank permission hub and Plaid portal syncing. We also talk about the impact API deals like this have on consumer behavior and fintech uptake.
Please introduce yourselves.
Gareth Gaston, US Bank: I’m Gareth Gaston. I’m the CDO and EVP of digital platforms and capabilities at US Bank. So what that means is I’m responsible for all of our enterprise, common digital technology like sales and onboarding, authentication, and communication. And I’m also responsible for the digital capabilities that empower our teams like agile ways of working, and also our UX design capability.
Ginger Banker, Plaid: My name is Ginger Baker and I am the head of financial access at Plaid. The financial access group is a new organization that is oriented around ensuring that people have access to their financial data and can permission that data to the applications and tools that improve their lives. In addition, with a bit of a play on words, the financial access organization at Plaid is wholly focused on financial institutions and ensuring that financial institutions also have access to the tools and technologies that allow their users to have a reliable, safe and transparent fintech experience. I’ve been at Plaid for about nine months.
What is the nature of the US Bank and Plaid integration? And why is it significant?
Gareth Gaston, US Bank: Part of the practice that I’m responsible for is our open banking and connected banking capabilities. We view it as very important to give our customers the ability to access their information and their money, whichever way that they choose, and we want them to be able to do that in a transparent and secure way. So it’s been a big priority for us to work with third parties, technology partners and aggregators to enable that. Plaid is obviously one of the biggest players in the data aggregation and technology partner space. It’s been a really important partnership for us to figure out with Plaid how to achieve those goals, which I know they have as well. So we wanted to make sure that our customers have access to the information without having to give away their login credentials. And that’s really what we’ve achieved here.
Ginger Banker, Plaid: We’re really excited about this integration — there’s two things here. One is that US Bank and Plaid really kept the consumer at the center of every decision that we made in the process of migrating the way that we enable users to permission their data, which has traditionally been through screen scraping to an API based solution. And what this meant was that the decision that we made around the integration and the way that it actually works is better for the user. It doesn’t give them a challenged experience — it allows them to continue to access the things that they care about in a way that’s safe and transparent.
Second, there is an interesting and new bidirectional permission hub that we’re using between the two companies that allows consumers to adjust their permissions quickly and easily either by accessing US Bank’s permission hub or through Plaid Portal, which is a product that’s currently in beta. And this is really unique, because it means that a user can go to either of those companies and take control of the places that they have permissioned their data. It gives them the transparency and allows them to take action. So the technology that we’re using to keep the two companies and these permission tools in sync is really a precedent-setting move for the industry.
What was US Bank’s motivation for the unique technical efforts here?
Gareth Gaston, US Bank: First and foremost, as Ginger said really well, both parties have kept the customer very much at the heart of this. What’s really been guiding us is this need to give the customer both the control over the data that they’re sharing and that they want to consume somewhere else, but also that security. So that being the mission both of us shared, if a customer has relationships outside of US Bank, then they can see all of those relationships on Plaid Link. If a customer is a US Bank customer and they have relationships in places where Plaid isn’t a player, then you can see those there, too.
Knowing the mission that we had to get to really guided us. How can we make all this possible without necessarily sticking rigidly to the way that we would like to do it in an ideal world? I think this was a terrific partnership to achieve the goal and still do it in a way that was safe, compliant and all the stuff that FIs would care about. So we were absolutely thrilled that we could come up with a technical solution that achieved those goals, took credentials out the system and delivered a great customer experience.,
Ginger Banker, Plaid: I just want to add a little context on the backdrop for all of us, which I know is not new news to anyone, but I think it just anchors the motivation and the intention that the two organizations have. With all of the digitization of just about everything that we saw over the last 12 to 18 months, we’ve seen that 73% of adults say that they want to continue to manage the majority of their finances digitally. So the tools that we can build to create that transparency for them and help them along on this digital journey are more important now than ever. We’ve heard that 14 million US citizens consider digital banking to be literally their only form of money management now. And so this is very different than the world that we were operating in two years ago. And so these kinds of partnerships, in the ways that we come together to ensure that this new digitization is safe and transparent and understood for people of all ages who are going through this transition, are an important component of this.
Are you seeing a growing sensitivity on the FI side to really customizd consumer permission data in a way that you didn’t see two years ago?
Ginger Banker, Plaid: We certainly started seeing the industry be more active. And this is not anything new in terms of the statement and the intention of moving towards API based solutions that give consumers a better experience that has been there for the last number of years. But what we’re seeing now is the technology and the technical creativity catching up with the intention. And that’s what I think was really interesting about the work that we did with US Bank — it was an example of some of that technical creativity coming to light. But we are also seeing it with other institutions. They’re recognizing they want to get to technical readiness faster than they have been, or because they’ve learned in conjunction with us and other technology partners along the way that there are ways in which the technology that they’ve built can be improved to enable this new, wholly digital universe for financial services for their users.
Can you talk a little bit more about this US Bank permission hub and the Plaid portal syncing?
Gareth Gaston, US Bank: The permission hub obviously works beyond the Plaid Link. But it’s very much part of how the technical solution works. Our goal is to give the customer a complete set of information about where their data is shared, with the ability to control down to the individual account level, and even eventually, to the type of information that they’re sharing with any given third party, so they have complete control over their data and their information. That’s our ultimate vision. I think that what’s important here is we know that some of our customers have information from US Bank that they want to share with third parties. They may equally have a relationship with another FI, which we wouldn’t be able to see in our permission hub but that they could see on Plaid Link, for example.
What do US Bank customers get from this integration that they didn’t have before?
Gareth Gaston, US Bank: First of all, I think customers are becoming far more sophisticated now. So this was something that perhaps people didn’t give much thought to before. How many times have you played a game on Facebook and just said, yes, fine, I’ll give you whatever information you’re asking for in conjunction for getting my horoscope or something for some future gazing thing? There’s been so much press that customers are now becoming more educated about where their data is being shared. And also the technology is catching up as well, being able to move away from screen scraping and provide the sort of transparency that we have.
There’s probably just a set of circumstances, whether it’s news about data breaches or these capabilities coming to life, that consumers will growingly want to have more visibility and transparency into what information is being shared, and where, and then have the ability to do something easily about that if they don’t agree. So you may have signed up, for example, to a fintech app at some point in time and have completely forgotten about that, and maybe not even use that app anymore. Maybe you’ve even deleted it from your phone. But that connection, technically, could still exist somewhere. And so by going into the US Bank permission hub, you could still see that that information is being shared. And you could terminate that from your bank, rather than terminating it from the fintech. I think it’s very, very powerful in terms of customer control and transparency.
Are you thinking about proactively alerting customers to scenarios like this, where they’ve shared their data with an app but no longer use it?
Gareth Gaston, US Bank: Yes, definitely. We already do sort of message. This is a an evolution and a journey. But our goal, which I think is guiding us, is that ultimate control and transparency. Permissioning your information externally is really just a set of preferences that you have, and we have a lot of ambitions around how we continue to give the customer more options about their relationship with US Bank, and also what they’ve done with the information they have in there. So I see this permission hub — we also have a profile center –and all of these sort of things merging together and really being one set of experiences where the customer can have a complete picture of either what they’re sharing or how things are being used, so that they can set preferences accordingly.
What are the takeaways from this partnership between Plaid and US bank that other players in the ecosystem can gather?
Ginger Banker, Plaid: I think there is a lot to be learned from this. I mean, Plaid is certainly on a crusade to eliminate the industry’s reliance on credentials. And I think that there’s work in terms of the how/when we get there, and one of the things that I was so impressed with the US Bank team is that they really genuinely put their users at the forefront. And so while there may have been decisions that could have made things easier or faster or aligned with product and technology builds that they may have done in the past, they always opted for the thing that would make the experience for the person using these applications, seamless, secure and delightful. I think that that is a very important principle to have as a foundation for optimizing for the user.
And I think some of the work that the two companies have done as a part of FDX, the Financial Data Exchange, helps to unify the industry around some of these common standards for secure data exchange. But making sure that we keep that consumer at the very forefront will help the decisions on the implementation details really come to life. That would be the one thing I think we could take away from this is that if we’re all moving towards this direction — you know, one of our goals is to have 75% of our traffic committed to APIs by the end of this year. If we’re going to make progress towards having that shared vision of the user at the center of things that we care about, it really helps us to move much more quickly.
Gareth Gaston, US Bank: One of the things that I think has been really awesome about Plaid is the flexibility and the desire to get to all the outcomes. I’ve had a number of my peers call, of course, and ask about the deal, because they’re perhaps still thinking about how they could do it. And I guess the message would be, at the end of the day, what’s important is that the customer has the information and the transparency. I can’t say enough about what a tremendous partnership that it’s been with Plaid, and how great they have been in not only sharing our view of, and having their own view of, customer centricity, but also the flexibility and creativity that Plaid has shown in terms of helping get to this fantastic outcome. What that signals is that if you have a great relationship, things can work out really well, both for what you need for your FI, but also, more importantly, for the customer. So we’d encourage the great open discussion and dialogue. And we’ve certainly enjoyed a terrific relationship that’s come up with all sorts of creative problem solving between the two companies.
I was thinking further about what you were saying about the permission hub. Ultimately, it’s not just about sharing the data, of course, which is very much what this conversation tends to be about because that’s what the news is: we’ve created a permission hub. We’ve managed to exchange data in a secure, transparent way. What is even more exciting about all of this is what the customer can do now with all of that information. This is really where I think things begin to get exciting and things start heating up, because now that we have information being exchanged securely without credentials, customers can feel more confident to do more things with more third party fintechs, for example.
And so as we think about all that, there’s so many exciting use cases where the world can go now and open up. So whether that’s validating accounts elsewhere and helping a customer apply for a loan, there’s so many things that are now possible. And that that is what US Bank is most excited about really: how we’ve empowered and enabled our customers to do much more with their money. And knowing that US Bank has created this ability for them to see the other information and have much more control and transparency over it.
There’s been lots of activity in open banking, connected banking, whatever you like to call it, over the last few years. But as Ginger said, it’s really been on the back of screen scraping. With commitments like US Bank’s and Plaid’s to get into a much more secure API driven environment, I really think this sets the stage for a very exciting next phase of opening up finance.