May 2019 Summaries

Plaid's API helps developers provide financial services to millions of consumers across North America. One challenge they faced was reconciling pending and posted transactions, which is crucial for notifying customers about new transactions without duplication. To solve this problem, Plaid initially used decision trees but later switched to a random forest model that combined bagging and feature sampling. However, the random forest model had a high false negative rate due to imbalanced datasets. They then implemented boosting, which significantly improved their model's performance by reducing the false negative rate by 96%. The new boosting model provides higher quality transactions data to clients and consumers, resulting in fewer support tickets filed about pending-to-posted transaction matching.

The Revised Payment Service Directive (PSD2) or Open Banking was implemented in the UK and European Union on January 13, 2018. PSD2 mandates banks to provide open APIs to Third Party Providers (TPPs), such as Plaid, for accessing data directly. The objectives of PSD2 include contributing to a more integrated and efficient payment market, improving the level playing field for payment service providers, enhancing security, and protecting consumers. TPPs are required to become registered as an Account Information Service Provider (AISP) in order to access data via these integrations. Plaid is a registered AISP since October 2018. Businesses that provide consolidated account information to end users may need their own AISP license, while others might not.

Plaid is expanding its financial services in the UK, aiming to make money easier for everyone by providing access to a financial network that allows developers to deliver user experiences from various banks and institutions. The company aims to build an inclusive financial system in Europe, starting with the UK, where fintech is thriving and producing over 1,600 companies expected to double by 2030. Plaid will provide instant and reliable access to popular banks and neobanks, giving businesses a foundation for growth and delivering on the promise of open banking with local expertise and global opportunity. The company invites start-ups and large enterprises to partner with it, making it easy for existing customers to add UK coverage through their existing integration with Plaid.

Plaid Direct is a lightweight integration specification that allows banks and fintech applications to quickly integrate into the Plaid data network, enabling open banking-style connectivity across financial services providers. This enables businesses to deepen engagement with their customers by providing seamless account connectivity, which can be used for personal financial management apps or other services. The integration process is efficient, taking as little as two weeks to complete, and includes robust security controls such as customer authentication and tokenization. By integrating with Plaid Direct, institutions can pursue partnerships with other Plaid-powered apps and institutions, making it easier to expand their reach and offerings.

The Sandbox environment has been updated with new features based on user feedback, including customizable accounts and metadata, a broader dataset of transactions, and triggerable webhooks for testing purposes. Users can now modify account details such as type, subtype, balance, and currency to fit their testing needs. Additionally, the transaction data in the Sandbox environment has been improved to represent a wider range of merchants, descriptions, and account types, with updated amounts to better resemble production traffic. The new /sandbox/item/fire_webhook endpoint allows users to trigger and test transactions webhooks on demand for an Item via its access token. Further improvements are planned for the Sandbox environment to enable more use case testing and refinement of applications.

Plaid's engineering office in Salt Lake City is led by Kira Booth, who was drawn to the company after a cold email and researching its operational challenges. She started at Qualtrics as a developer and worked her way up to leadership roles before joining Plaid to build an office from scratch. Booth values diversity in her team and looks for candidates with strong problem-solving skills and ownership. As a manager, she emphasizes vulnerability and openness, fostering an environment where team members feel comfortable sharing their mistakes and ideas. She enjoys coming to work daily, appreciating the company's impact on the tech industry and the creativity that drives innovation at Plaid. In her free time, Booth indulges her artistic side through painting and other creative pursuits.

In April 2019, Baker Shogry & Jesse Dhillon announced updates to Plaid's system. They upgraded several institutions, including Boeing Employees Credit Union, VyStar Credit Union, and Randolph Brooks Credit Union, providing longer transaction histories, improved latency, expanded product support, and more frequent transaction updates. Additionally, new Dashboard and API functionality were released to provide real-time status across bank integrations and Plaid systems. The institution status includes overall status, performance breakdown, and last status change date. Item status provides recent transaction updates, last webhook fired, and granular error code information for Items requiring attention. System status displays the uptime of their three API environments. Furthermore, improvements were made to Link Web, decreasing load times by 35%, and Link iOS released LinkKit v1.1.18 with general bug fixes and enhancements.