January 2023 Summaries

Plaid has submitted its response to the Consumer Financial Protection Bureau's proposal outlining their vision for a strong consumer financial data rights rule, which aims to empower consumers to make informed financial choices by giving them control over their data. The company supports establishing a comprehensive financial data access right, requiring companies to provide transparency and control over consumer data, ensuring consistent data access regardless of where they manage their money, protecting consumers' data access while supporting the industry shift to APIs, setting clear standards for data aggregators, and promoting innovation in the financial services ecosystem.

Plaid is committed to enhancing consumer transparency by championing Data Privacy Week and leading the industry in building practical tools that facilitate giving consumers meaningful insight into and control over their shared financial information. The company's Data Transparency Messaging (DTM) feature, now available for implementation, provides users with a new way of understanding the information needed to power an app or service they want to use, empowering them to make informed choices about their financial lives.

Plaid, a leading provider of consumer and business payment solutions, has partnered with a digital banking services company to reduce ACH returns and create a better user experience. The Automated Clearing House (ACH) Network remains a crucial part of the US financial system, processing 26.8 billion transactions worth $61.9 trillion in 2020. However, using ACH comes with challenges such as managing returns due to insufficient funds, stop payments, or incorrect account information. To address this, Plaid's Signal solution has helped the company reduce its return rate on incoming transactions by 50% and lower its overall return rate by 83%. The integration was seamless, thanks to outstanding technical support from Plaid, allowing the company to roll out the solution quickly. With Signal, the company can deliver programs with ACH to more customers in more places while maintaining proper risk controls. By partnering with Plaid, the company has been able to reduce returns and bad actors, enabling it to scale its operations more efficiently. To other companies facing similar challenges, Plaid advises connecting early on in the process, researching returns and fraudulent activity, and seeking guidance from Plaid to overcome obstacles. The company's top priority for the next 18 months is expanding ACH services to existing and new users of its alternative banking services.

As financial services continue to evolve, fraud is becoming increasingly sophisticated, with identity theft costing over $712 billion in the U.S. in 2020 and ACH fraud exceeding $55 billion in 2021. To combat this, businesses must adopt a holistic approach to fraud prevention, breaking down silos between teams to share learnings and align approaches and tooling across departments. Finding the right balance between user experience and risk management is also crucial, as adding more verification steps can increase security but also increase friction. By leveraging diverse signals and data networks, organizations can stay ahead of evolving fraud tactics and create a safer digital finance ecosystem for consumers. Implementing passive verification technology and using partner networks like Plaid can help improve conversion rates while reducing identity and transaction risk.

Plaid's 2022 Year in Review` highlights the company's efforts to help businesses grow and tackle challenges with a fresh perspective in the digital finance space. By leveraging Plaid's best-in-class Link experience, businesses can onboard and activate more customers while reducing fraud and spend on KYC compliance. Additionally, Plaid is helping banks enter a new phase of real-time, digitally-native payments with dynamic payment flows, and offering data insights that drive better results through features like personal finance categories and the Sync API. The company is also navigating an evolving lending landscape with its credit solution, increasing retention with Open Finance solutions, and providing greater data transparency to consumers. Furthermore, Plaid is hosting virtual events, including a Tech Talk with CEO Zach Perrett, to share predictions for fintech in 2023 and introduce innovative businesses using Plaid to power their growth.