March 2023 Summaries

The evolution of identity verification is accelerating the future of fintech by turning the tide against fraud, improving KYC compliance, and unlocking new fintech use cases. Plaid's acquisition of Cognito in January 2022 has enhanced their identity verification product offerings, with over one-third of new customers purchasing Identity Verification (IDV) in Q4 2022. Fintechs are rapidly adopting IDV for KYC compliance, finding it easier to implement due to its no or low code solution, which reduces the risk of cross-team miscommunication and poor documentation. IDV is integral to onboarding and account funding, making sure users are who they say they are, and preventing crypto fraud, which has the biggest financial incentives for fraudsters. Emerging identity technologies like mobile driver's licenses may shift control of identity data towards government-based verification systems, giving consumers more control over their information, but also raising risks such as surveillance. While decentralized identities hold promise, they don't currently adhere to KYC guidelines, making them legally unpermissible. IDV technology is rapidly evolving to meet consumer and financial services provider needs, helping combat fraud, eliminate friction points, streamline user experiences, and more.

Plaid has been named a Leader in The Forrester Wave: Open Banking Intermediaries, Q1 2023 report, receiving the highest scores in current offering and market presence categories. Plaid's scale, coverage, and ambition targets a global open finance ecosystem, with plans for regional expansion. The report highlights Plaid's capabilities aligning with customer priorities around acquisition and retention, risk, and fraud mitigation, as well as its industry-recognized tools for API connectivity and consumer permissions portals. With Consumer Financial Protection Bureau rulemaking on the horizon, Plaid is building tools to streamline API connectivity and make it easy for end-users to understand and manage their data sharing.

Plaid's Security Portal has been launched to demonstrate the company's commitment to data safety and security, providing transparency and detail around its robust security practices. This portal will be regularly updated with the latest information regarding Plaid's security practices, audit reports, certifications, and other related documents. As consumers increasingly prioritize trust, transparency, and control when choosing financial services, Plaid is working to protect and empower them as they digitize their financial lives. The company has partnered with Okta to offer a combined OAuth solution for streamlined and secure authentication and authorization of shared consumer-permissioned data. Additionally, Plaid's Enrich API cleanses, categorizes, and enhances transaction data, helping lenders personalize product offers and uncover actionable insights. Plaid is also expanding its partnership with Mission Lane, providing additional capabilities to help realize the company's mission of advancing financial access to all. Furthermore, Plaid's Core Exchange platform is being used by various data partners, including Wise and TAB Bank, to deliver customer value and improve API connectivity.