- Wells Fargo signed a data exchange agreement with fintech company Plaid that is meant to give customers greater control over the bank account information they share, the bank announced Thursday.
- The initiative, set to launch within a year, will let Plaid pull customer data from the bank's server through an application programming interface — a tokenized "handshake," the bank said — rather than "screen scraping." That practice, which big banks like Wells and JPMorgan Chase have derided as insecure, allows third parties to take bank customers' user names and passwords, log in on their behalf, and copy and paste their banking transaction information into the third party's software.
- The move marks the bank's second digital technology advancement this week. Wells Fargo announced Tuesday it will pilot Digital Cash, a blockchain-run service, to settle internal transfers of cross-border payments.
Plaid has data-sharing agreements with several companies in the banking, payments and currency exchange space, including JPMorgan Chase, Venmo and Coinbase.
Wells Fargo executives see the Plaid agreement as crucial to the development of the bank's Control Tower feature, which customers can use to see all of the third parties to which their bank account is connected or with which their data is being shared.
Ben Soccorsy, head of digital payments at Wells Fargo Virtual Channels, lauded the deal for its potential to empower customers through transparency and control. "If customers want to share their Wells Fargo account information with a Plaid-supported app to help them better manage their finances, we want to enable them to do so seamlessly and more securely," he said in a press release. That includes customers' ability to turn data sharing on or off through Control Tower.
A Plaid executive, too, said the bank is thinking in the right direction. "I believe that it's the right thing for a user to be able to go to a bank’s home page or control panel and see where their data is being shared by that bank," Sima Gandhi, Plaid's head of business development and strategy, told American Banker. "Wells is doing the right things. We need to keep raising the bar as to what control means as the technology evolves."
Plaid this week revealed that payment card giants Mastercard and Visa are among its investors.