September 2022 Summaries

A personal finance app called Stash is helping millions of Americans build wealth by providing easy-to-use budgeting tools, a taxable brokerage account, and a debit card that earns users stocks each time they use it. The app was founded in 2015 and has since earned a spot on Forbes Advisors' Best Budgeting Apps list with over six million users and three billion dollars in assets under management. Stash's VP of Product, Dan Mendes, attributes the app's success to its focus on long-term wealth building and its ability to provide personalized experiences for users through data insights from Plaid. The app uses transactions data to offer features such as Round-Ups, which enables users to save money by rounding up purchases, and Stock-Back, which allows users to earn rewards back in the form of stocks. Stash is committed to providing value to its customers, particularly those who are first-time or beginner investors, and is continually iterating on its features to better serve their needs.

Plaid introduces Wallet Onboard, a solution for connecting over 300 self-custody wallets like MetaMask, Coinbase Wallet, and Ledger through one simple SDK integration. Privacy Controls suite is launched with Permissions Manager API to enable organizations to build their own consumer permissions portals. New Identity Verification features are added to improve conversion and reduce fraud. A new API for categorizing and enriching transaction data at scale is introduced. Plaid Academy offers a tutorial video on implementing Plaid Auth, while the Discord community for developers is launched. The Fintech Effect 2022 report is released, highlighting consumer use of fintech tools and building the future of digital finance.

The Single Euro Payments Area Instant Credit Transfer Scheme (SEPA SCT Inst.) is a digital retail payment scheme that enables electronic transactions to be settled in real-time, including weekends and holidays. This could challenge the dominance of traditional cards or wire transfers, leading to further competition in the market. The European Commission aims to bring in legislation mandating an EU-wide instant payments scheme by the end of 2022. To achieve this, the Commission must include features such as making adherent banks offer SCT Inst. as their primary offering, supporting both sending and receiving instant payments, and providing free instant payments for consumers. Additionally, there is a need for more protection on payment certainty for merchants, assurance that instant payments are less risky than alternative options, and addressing interoperability issues between clearing and settlement mechanisms. The widespread adoption of instant payments could bring significant value to businesses in Europe, but challenges such as high transaction fees and limited payment limits must be addressed.

Plaid's Core Exchange integration has enabled Project Finance, a digital banking provider, to remove credential sharing and provide customers with access to their financial data. This partnership aims to help credit unions build world-class digital banking experiences and ensure they meet customer needs and expectations. By using Plaid's Core Exchange solution, Project Finance can now offer a customized digital banking experience that helps customers achieve financial wellness and makes informed decisions about their financial lives.

The open finance market is expected to grow from $15.13 billion in 2021 to $48.13 billion in 2026, driven by regulatory oversight and shifting consumer preferences towards digital solutions. Financial institutions are adopting open finance solutions to capitalize on this growth, with the potential to accelerate their digital transformation and diversify revenue opportunities. To succeed, financial institutions must prepare by confirming the scope of their initiative, adopting a digital-first mindset, re-learning lessons from open banking, defining the right environments for service build and deployment, embedding good development practices, developing prioritized implementation roadmaps, and partnering with industry-leading data transfer networking providers to enhance customer experience. Several financial institutions have already begun implementing open finance solutions, including Capco and Plaid, which offer joint open finance offerings to help firms streamline efforts and avoid pitfalls.

Betterment, founded in 2008 during the global financial crisis, is a New York-based online financial advisor with over $33 billion of assets under management and 730,000 customers. It pioneered automated technology to make investing easier, offering two services: Betterment Digital for automated portfolio management and Betterment Premium for access to certified financial planners. To improve user onboarding and provide personalized finance insights, Betterment partnered with Plaid, a platform that simplifies the process of connecting users' outside financial accounts. This partnership has enabled 91% of users to maintain a higher median account balance.

Staying up-to-date with Nacha's Operating Rules is crucial for organizations as it ensures a safe and efficient ACH network, reduces fraud, promotes data security, improves usability, and avoids penalties, ultimately benefiting both the organization and its customers by providing a better processing experience and protecting consumers against new fraud scams.

Klover, a fintech platform founded in 2019 and based in Chicago, aims to democratize access to financial products by providing benefits such as free checking accounts, savings tools, credit products, credit cards, points on credit cards that translate to free airline tickets, or free hotel stays. The company leverages consumer-permissioned data and insights from trusted partners like Plaid to create a 360° customer view, driving engagement, offering tailored financial solutions, and helping users find financial freedom. Klover offers three products: cash advances, personal financial management (PFM) tools, and banking services, with the latter announced as an exciting new product evolution. The company's PFM tool, Klover+, uses Plaid Transactions to deliver insights on user spending, savings, and credit scores, resulting in 20% savings back to users and a 58-point increase in credit scores compared to industry averages. With a focus on proactive customer engagement and leveraging data to build financial health, Klover is poised for growth and expansion into new markets.