January 2022 Summaries

Introducing Plaid Accelerate's Second Cohort Plaid’s mission is to unlock financial freedom for everyone by supporting founders who reflect the diversity of consumers who can benefit from innovative financial services. The program aims to provide tactical assistance and a supportive community for early-stage BIPOC founders, helping them impact the future of financial services. Plaid Accelerate has expanded its program to include two new cohorts in 2022, welcoming four promising companies that span critical problems with innovative technology, including digital lending platforms, APIs for cross-border financial services, and open-source performance monitoring software. The first cohort begins a bootcamp tomorrow, while the second cohort will take place from July to December, supporting startups with products released in GA or beta. Plaid Accelerate is grateful for the support of its partners, who have dedicated countless hours helping founders optimize for success.

Fintech has seen significant growth in consumer adoption, with a 30% year-over-year increase in U.S. consumers using technology to manage their finances in 2021, reaching 88% of the population. This growth is expected to continue in 2022, with increased interest from regulators as they update rules for fintech technologies. Policymakers are predicted to move ahead with plans to improve competition in the financial services sector, particularly in the United States, where regulatory issues such as licensing, supervision, and enforcement need clarification. Open banking initiatives are also expected to gain momentum in 2022, with Canada poised to launch its open banking system by 2023, following a comprehensive proposal and roadmap produced last year. The UK is predicted to see a shift in traditional payment methods for consumers, with the introduction of Variable Recurring Payments, and the European Union is expected to mandate adherence to the SEPA instant payments scheme. These developments will likely have significant impacts on businesses and consumers alike, driving innovation and change in the fintech ecosystem.

Cristina Ciaravalli, Mid-Market Account Executive at Plaid, shares her experience and insights on working in fintech sales. She discusses how she helps midsize companies get up and running with Plaid, impacting people's financial lives by enabling the creation of new apps and services for managing finances. Cristina highlights the inclusive culture at Plaid and its efforts to build a diverse and equitable work environment through employee resource groups and initiatives. She loves working at Plaid due to the people and the fast pace of innovation, which allows her to be part of something bigger than herself. Cristina also talks about her journey into sales, how she has helped grow the sales function at Plaid, and her involvement in the broader fintech community. Lastly, she shares her passion for cooking and the best piece of advice she has received in her career.

Plaid has introduced Plaid Portal US, a privacy tool for users who have connected their financial accounts to apps and services using Plaid. The portal allows users to view which apps have access to their financial information, control where it is shared, disconnect financial accounts from apps, or delete their data from Plaid's systems. This tool aims to educate and empower consumers about sharing their financial data while promoting stronger privacy concepts and safeguards for consumers everywhere.

Plaid has acquired Cognito, an identity verification and compliance platform that streamlines the process of verifying identities for users signing up for financial services online. The acquisition aims to improve user experiences during onboarding processes by combining all necessary tools and data sources into a single platform. This will enable more customers to be successfully onboarded while reducing fraud risks. Cognito's expertise in identity verification, combined with Plaid's experience in connecting users to financial apps, will help make digital finance easier, safer, and more accessible for everyone.

Plaid is expanding its coverage for customer authorizations, including Automatic updates to the Account Select pane and a new Transfer solution that simplifies ACH payments. The company is also launching an App-to-App OAuth testing feature in Sandbox, allowing developers to test their flows securely. Plaid's CEO Zach Perret will be discussing fintech trends and predictions in a virtual event on January 24th. Additionally, the company has seen success stories with clients such as Ellevest, which increased its conversion rate by 111%, and Stash, which boosted deposits by 19%.

Plaid and Instant payments are closely linked in Open Banking, with Payment Initiation Services (PIS) relying on licensed providers like Plaid to initiate payments through banks. PIS needs well-connected banks that participate in the Single Euro Payments Area (SEPA) and its schemes, such as SEPA Instant Credit Transfers (SEPA SCT Inst), to fully scale and impact the EU payments space. The European Commission has recognized the benefits of combining open banking and instant payments, which can revolutionize retail payments with higher certainty, quicker settlement times, and reduced susceptibility to fraud. SCT Inst payments are cheaper than traditional card payments, but their adoption is currently limited, with only 1 in 10 transactions routed through instant payment rails. To succeed, open banking providers need full coverage of SEPA SCT Inst amongst EU banks, which is why the European Commission should consider mandating access across the EU in 2022 to ensure free or non-discriminatory access for users.