July 15, 2021
Setting the standard for safe and secure data access
John C. Pitts
Last week’s Executive Order announced the next era of digital finance in the U.S. With open banking rules on the horizon, fintech is gearing up for a world in which consumers’ data access comes with both greater certainty and heightened expectations. In our role as the infrastructure enabling consumer data access, we will continue to push the industry forward on practices and experiences that put consumers and their data at the center.
When the first major wave of fintech came to market in the early 2010s, financial data sharing wasn’t new. Applications existed for decades that relied on consumers to import their financial data. But at the time there wasn’t a standard way for developers to build data sharing capabilities into their services. This often resulted in a clunky experience for both developers and their customers, and required consumers to share their online banking passwords with every fintech app or service they used. It was a time reminiscent of the early days of e-commerce, when consumers went through a different experience on every website, before companies like PayPal stepped in to streamline and manage the online payment process for everyone securely.
What quickly became clear was that an explosion in fintech use cases would require a more secure way for people to share their financial data. This is where Plaid came into the picture. We set out to build a platform to enable developers to launch fintech apps and services without needing to build discrete connections to each of the thousands of financial institutions or store and manage their users’ credentials. Our product would provide a higher level of scalability and security for this nascent ecosystem that presented so much potential to improve people’s financial lives. Today, Plaid enables people to securely access and share their financial data from over 11,000 financial institutions to more than 5,000 fintech apps in the U.S., Canada, the UK, and Europe.
Introduction of Plaid Link
For the first few years, we focused on helping developers simplify the process for their customers to connect financial accounts to their apps. But as open banking took hold on a global stage, we saw the opportunity to also pioneer a new front-end user experience that allowed consumers more choice and transparency into how they want to share their information. We set out to build a product that puts consumer control and transparency even more front and center while preserving a best-in-class developer experience.
In 2015, we created a new industry standard with Plaid Link, giving fintech users a secure and easy user experience for connecting their financial accounts with the fintech apps they want to use. By creating a standard approach to data sharing across their fintech applications, we established a new expectation for consumers when it comes to how and with whom they are sharing their data.
Plaid Link - typical Plaid Link onboarding process for a Plaid-powered app
Today, when you’re using a Plaid-powered app like Venmo to pay your friends, Betterment to save and invest, or Microsoft Money in Excel to track your expenses, you’ll encounter the Plaid Link flow when you’re connecting your financial accounts to these apps and services. The clean, easy-to-use interface makes it easy for end-users to authenticate and permission their financial data with the apps and services they use to manage their financial lives.
As the industry and policy continue to develop around open finance, we will continue to innovate on our user experiences to benefit consumers. We’re committed to building a safe ecosystem that fosters innovation and promotes consumer transparency and control.