November 2021 Summaries

The European Banking Authority (EBA) has closed its public consultation on amending Regulatory Technical Standards (RTS) for Strong Customer Authentication (SCA) and the 90-day exemption. Although the EBA proposes a mandatory exemption from SCA when access is through an Account Information Service Provider or licensed Third Party Provider, it does not resolve the core problem. The industry suggests extending the SCA renewal period to 365 days in the short term and managing consumer consent at the TPP level in the long term. The EBA acknowledges that current SCA has caused friction for customers and negatively impacted account information service providers, but more fundamental reform is needed.

Plaid and Moneybox have partnered to improve customer control over finances during lockdown, when millions of people turned to fintechs to manage their money. The partnership aims to make payments faster and more transparent, allowing customers to top up their accounts instantly through Plaid's Payment Initiation. This collaboration enables users to securely connect their financial accounts and provides a better in-app experience. With the help of Open Banking technology, Moneybox plans to introduce new functionality and further enhance its customer experience.

As a software engineer lead at Plaid, Max Johnson is responsible for leading a team that works on one of the company's new product initiatives. He helps create a long-term technical strategy and provides feedback to ensure everyone is aligned. Max believes in creating an inclusive culture where his team feels comfortable bringing their authentic selves to work and feeling proud of their impact at Plaid. The company values transparency, self-awareness, and reflection, which Max credits for his own growth as an engineer. He praises the company's collaborative culture and diverse teams, noting that it allows him to grow both personally and professionally. With over 900 people in the organization, Max has seen significant changes since joining five years ago, including a shift from scrappy individual work to more ambitious product efforts. Throughout his career, Max has learned the importance of self-reflection, which he believes is crucial for growth and developing meaningful conversations with peers. When not working, Max enjoys hiking, electronic music, and learning new skills, such as coding and songwriting.

We released several new features and updates, including a new Investments API with custom instructions for account linking, an early access program for personal lenders called Plaid Income, a complete ACH solution for lenders called Transfer, and a new Sync API to stay on top of transaction updates. We also updated the Account Select pane in Plaid Link, introduced an automatic update to the Consent pane, and released regularly upgrading mobile SDKs. Additionally, we launched our payment partner ecosystem, enabled consumers to connect their accounts from fintechs like Robinhood and Chime, partnered with PensionBee to make Open Finance a reality, and helped Vola and Stash save users money by providing swift onboarding and smart tools.

Plaid, along with a coalition of financial technology and security compliance companies, has launched the Open Finance Data Security Standard (OFDSS), a proposed framework that addresses common data security risks in the fintech industry. The standard is designed to help emerging digital finance companies protect consumer information and instill confidence in the fintech ecosystem about robust data security protections. OFDSS is a response to the need for more tailored data security guidelines, as existing standards were not designed for cloud-native delivery models or early-stage companies. The standard establishes 63 individual security requirements across 12 control domains, contextualized with implementation guides and high-level audit steps, and is intended to be a living document that will evolve over time. Founding supporters include Plaid, Flinks, MX, Truework, Drata, Laika, Secureframe, and Vanta, which aim to raise the bar for data security in the fintech ecosystem while enabling innovation and protecting consumers.

Plaid has expanded its network to connect fintech accounts to other digital financial services, allowing people to link their accounts across various institutions and apps. The company's efforts aim to ensure interoperability across financial services, as revealed in a survey that showed seven in ten Americans want to connect their financial accounts together. Plaid now provides coverage for 75% of searches made through its Link platform, with hundreds of millions of users across North America and Europe having connected their accounts to various apps and services. The expanded network includes fintech companies such as Aspiration, Chime, and Robinhood, as well as banking-as-a-service platforms like Treasury Prime and Unit. This expansion enables consumers to put their financial information to work across more services, providing great choice and access to services for the underbanked, and helps customers deliver expanded functionality and value to users.

The Financial Access Newsletter by Plaid aims to keep partners updated on the latest industry developments shaping open finance. Key updates include enhancing data access through secure API connectivity, championing Universal Data Access, and encouraging bi-directional data sharing with a revised developer policy. Thought leadership pieces focus on trends impacting open banking, financial inclusion efforts, and partnerships with Silicon Valley Bank and Q2 to improve digital banking capabilities.

Vola, a New York-based fintech company, was able to save its users $18 million in overdraft fees by utilizing Plaid's capabilities to access user-permissioned financial data. The company's ability to do so hinges on its agile structure and low fixed costs, which enable it to provide smart tools for managing finances such as avoiding overdraft fees and building credit scores. Vola was recommended by its ACH payment processor to use Plaid for this capability, and after evaluation, the company chose Plaid as the solution.