November 15, 2023
Delivering a safe and secure open finance system for all
John C. Pitts
The Consumer Financial Protection Bureau (CFPB) recently proposed its 1033 rule to jumpstart competition in financial services and accelerate the shift to open finance. This is great news for consumers and a welcomed step for our industry and the entire digital financial ecosystem. Giving consumers an easy and secure way to access and share their financial data with the services that work best for them is a core operating principle at Plaid, and we’re excited to see this one step closer to being further reinforced in the law.
Plaid was founded on the belief that people should retain control over their financial data, including where they share it in order to access services. Today, our secure open finance solution helps millions of consumers safely and easily connect their financial accounts to the apps and services they rely on -- ones that help them save money, pay bills, manage budgets, and save for retirement.
With consumers as our North Star, we have added features to help them – and the apps and services they rely on – navigate the evolving world of digital finance. Over the last several years we have:
Championed the adoption of APIs across our ecosystem. We are proud that 75% of connections made via Plaid are facilitated by API integrations and we continue to encourage the industry to adopt secure API technologies that promote consumer access and choice, including offering our Core Exchange product to help financial institutions with adopting API technologies.
Built Plaid Portal, a privacy tool where consumers can securely view and manage connections they’ve made through Plaid. Consumers can use the tool to view the connections all in one place, disconnect financial accounts from apps, and even delete financial data from Plaid’s systems.
Partnered with financial institutions to enable them to build privacy tools in their own apps – offering consumers the chance to view and control connections made through Plaid on an institution’s own app or mobile platform.
Became certified in internationally recognized security and privacy standards ISO27001 and ISO27701 as part of Plaid’s Security and Privacy assurance program, which also includes our annual SOC 2 Type II report. Through this program, we continue to comply with the highest levels of privacy and security standards.
Launched our Security Portal, where partners and customers can see a comprehensive view of our security practices, audit reports, certifications, and other related documents to expedite their diligence and make informed decisions when working with Plaid.
Partnered with other open finance providers and security firms including MX, Pinwheel, Secureframe, Very Good Security and others to create the Open Finance Data Security Standard (OFDSS), a framework of requirements addressing consumer financial data security risks within the industry.
Evolved the open finance experience for end users in 2015 with the launch of Plaid Link, our consumer interface.
While these initiatives have gone a long way in advancing standards across the industry, we continue to seek out ways to further empower consumers with better transparency and protections across our ecosystem. As an example, our customers are beginning to adopt an additional data transparency feature to further explain the types of data an app is requesting, making it even easier for people to see what data they’re choosing to share with an app or service. We are also building tools for partners to make it easy for financial institutions to view all applications or services a consumer (their customer) has connected to an account via Plaid. We believe that these types of initiatives usher in more transparency and ultimately provide consumers with more choice and control over how they share their financial information in an open finance world.
We believe that the CFPB’s 1033 proposal is a foundational step towards providing consumers with a protected financial data right, akin to what many people already benefit from around the world. Strong protections around a consumer’s right to stay in control as they share their information with more services will be critical to driving this forward.
Today, Plaid helps hundreds of millions of people benefit from solutions built by thousands of companies, none of which would exist if we didn’t have a thriving open finance ecosystem in place. That ecosystem will not be successful if we are not collectively grounded in trust and transparency. We’re committed to progressing the ways in which we protect and serve consumers as more services become available and more people choose to manage their money online. We look forward to the CFPB continuing its efforts to solidify 1033 on behalf of consumers and in support of continued innovation.