June 2023 Summaries

Plaid has introduced the Financial Insights Report to simplify underwriting for lenders by utilizing open banking data. The report provides a comprehensive financial picture of potential borrowers, including specific credit categories, affordability insights, risk indicators, account holder names, detailed historical transactions, and aggregated insights across all connected accounts. This helps lenders make more confident decisions faster while improving the borrower experience. The Financial Insights Report is currently available in the UK and can be accessed through Plaid's customizable out-of-the-box front end or in JSON and PDF formats to support automated and manual decisioning processes.

An AML compliance program is designed to prevent money laundering, terrorist financing, and other forms of illicit activity by identifying and addressing various risks. Fintechs should comply with AML regulations in the sense that they should never allow their products and services to be used to facilitate financial crime, but not all fintechs are required to develop a full-scale AML program. Building an AML compliance program can help reduce the overall burden of financial fraud, as the average fintech loses 1.7% of its annual revenue to fraud. Maintaining fast onboarding and connectivity when implementing an AML compliance program will be challenging for many due to consumers' limited patience, but a staged approach with more time spent on higher-risk customers can help mitigate this challenge. Automated identity verification solutions can save time by quickly performing most customer identification program requirements and creating a seamless onboarding experience. To get started, fintechs should understand their target market and identify and prioritize high-risk customers before financial crimes even occur, implementing a risk-based approach to meeting AML compliance requirements.

The article discusses the growing trend of non-financial companies integrating financial services into their offerings to access new markets and revenue streams. It highlights that while embedded finance offers numerous benefits, it also presents complex challenges that require a trusted industry leader like Plaid for successful implementation. The author outlines seven ways in which Plaid can help optimize the user experience, including fund account from virtually any financial institution, boost conversion rates, reduce fraud risks, and enable instant account funding.

Plaid introduces Beacon, an anti-fraud network designed to mitigate repeat fraud against businesses, protect consumers, and create a safer digital finance ecosystem. With Beacon, fintechs and financial institutions can share real-time information securely across the ecosystem to identify compromised identity information and prevent fraudulent activities. The network is accessible to all fintechs and financial services providers, helping them detect threats early and protect their customers from various types of fraud. By partnering with Plaid, businesses gain valuable insights that contribute to a more secure digital finance environment.

Plaid has introduced Signal Dashboard, a tool that makes ACH risk assessments accessible to any company, regardless of their data science resources. The dashboard allows businesses to analyze real-time ACH return risk and make smarter decisions, enabling faster and safer fund transfers for customers. Since launching Signal in November, Plaid has tripled its monthly processing volume and currently protects over $2 billion in transactions per month across various platforms. With the new dashboard, companies of all sizes can access network-based risk assessment to deliver a seamless user experience at sign-up.

Plaid has introduced a new hosted Link solution that allows lenders to access real-time cash flow data more easily during the underwriting process. With cash flow underwriting becoming an industry standard, this solution aims to make it as simple as possible for lenders to access real-time cash flow data through Plaid. The use of alternative data in credit decisioning processes is on the rise, with many leading digital-first financial services companies using Plaid to help consumers share their assets and income information more easily. Consumers are increasingly comfortable sharing bank statements, rent/utility payment history, and savings and investment account information for better lending decisions. Rising interest rates and inflation have made deeper consumer visibility more important than ever, with 83% of traditional lenders open to using cash flow data like bank account balance and transaction history to modernize loan offerings. Plaid's new hosted Link experience can be helpful for both digital and online presence management, allowing support agents to help customers with verification during live chat. The company is also working with industry organizations to help lenders make use of alternative data, such as partnering with Credit Builders Alliance (CBA) on a pilot program to provide consumers with better credit options.

We can see that Plaid is continuously improving its Link experience to make it easier, faster, and safer for consumers. The company has made several updates in the last few months, including improvements to institution selection and search results, personalized institution lists, better search results, higher conversion rates for OAuth flows on mobile-web, a better user experience with OAuth guidance, and stay-up-to-date Plaid SDKs. These changes aim to reduce user drop-off during the transition from an app to Link, improve conversion rates, and provide a more seamless user experience.

Plaid has introduced an all-new identity verification experience that allows consumers to fast track verifications across Plaid-powered apps and services. The "verify once, verify everywhere" approach enables companies to offer faster onboarding while remaining KYC compliant. Since its launch last year, hundreds of companies have chosen Plaid Identity Verification, with many seeing success rates consistently above 90%. This new experience reduces time to complete a verification session in half and ensures that users are verified against the required checks according to each business' unique success criteria.

Addepar, a leading investment platform for professionals, partners with Plaid to provide real-time visibility into financial holdings. The partnership aims to help advisors serve their clients by offering seamless access to over 12,000 financial institutions and enabling them to view cash balances across each account in one place. This provides valuable insights that empower advisors to make data-driven decisions about portfolio performance and provide informed guidance to clients. The integration has been successful, with positive feedback from beta users who appreciate the seamless user experience and time savings. As the wealth management industry continues to evolve, Addepar is positioning itself for success by investing in its platform and developing new workflow solutions and data products that drive operational efficiency and competitive advantage.

ConfigDB is a unified app config system designed to address the pain points of previous configuration systems at Plaid. The system aims to provide availability, runtime update propagation, and programmatic edits while meeting constraints such as high read load, dataset size limits, and data model requirements. ConfigDB stores data in a Git repository hosted on GitHub Enterprise, utilizes protobuf for schema definition and data serialization, and features a transactional read API with type-safe access to datasets. The system also includes validation and approvals mechanisms to ensure data integrity and security. By leveraging existing technologies like S3 and gRPC, ConfigDB provides a scalable and maintainable solution for managing application configurations.

The new Plaid dashboard has been redesigned to improve user experience, making it easier for customers to find and access tools they need, discover new ones, and navigate the platform more efficiently. The redesign focuses on simplifying the dashboard layout, addressing navigation issues, and providing dedicated spaces for various products and features, including a developer section with links to important settings. The updated design aims to save users time and make it easier for them to work together with Plaid's tools, with ongoing improvements planned to further enhance the user experience.