Payroll data: The next frontier for fintech and open finance

Consumer-permissioned access to payroll data could unlock new applications and improve consumers’ financial lives

As fintech adoption exploded over the past decade, consumers became familiar with connecting their bank, investment and credit card accounts to help power products and services that helped make money easier to manage. However, the full picture of a consumer’s personal financial situation extends beyond just these types of accounts. Opportunities exist to give consumers better control over other types of financial information to unlock new types of products and services.

In our new white paper, learn how improving consumers’ ability to share their payroll data has the potential to benefit consumers and the financial ecosystem.

Payroll data – the next frontier for fintech
Payroll providers store critical data about consumers, including information about their income, employment, identity, retirement contributions, and benefits. As consumers continue to adopt fintech, giving them control of their payroll data presents the next opportunity to advance fintech innovation that can help improve consumers’ financial lives.  

In our white paper, we highlight how the payroll provider ecosystem is embracing a data transformation, driven by their growing interest in playing a helpful role in employees’ financial lives. From financial wellness benefits to third-party marketplaces, payroll providers are beginning to offer data-driven services that help employees make the most of their finances. More than half of all companies now offer some form of financial wellness benefit, as the workplace increasingly becomes a hub for one’s financial life.

Payroll data provides a more holistic view of a consumer’s finances
The financial information contained within payroll data is critical for consumers. It helps them get the full picture of their finances, and when shared with fintech providers may help them qualify for a loan, find better rates, and even optimize earnings from multiple income streams. When consumers have the ability to easily access, control, and share this data, they can make sure they’re allocating their funds in the best way possible for them, starting from the moment they earn their income.

Just as Plaid has opened the door to a new wave of fintech integrations, payroll-connected APIs are poised to vastly improve underwriting, upgrade employee-provided financial benefits, and streamline and scale consumer and enterprise fintech companies alike.- The Promise of Payroll APIs, Andreessen Horowitz, October 2020

Payroll companies are embracing open finance
Payroll companies are recognizing the role data access plays in Americans’ growing fintech use, and are increasingly adopting their own data access strategies. Plaid is engaging with major payroll providers to work towards improving consumer-permissioned payroll data access. Providing secure and reliable payroll data APIs will allow developers to enhance lending and benefits products for consumers and can help companies to offer stronger financial benefits programs for employees.  

Just as open banking and improved consumer access to bank account information drove massive fintech innovation over the last decade, improved consumer access to payroll data holds promise to unlock the next new wave of innovation that can benefit consumers and move the industry a step closer to open finance.