October 2024 Summaries

October 28, 2024, Plaid has announced its partnership with Rocket Companies, a Detroit-based fintech platform company, to deliver real-time cash flow data for loan underwriting and consumer budgeting. Eric Sager, Chief Operating Officer of Plaid, oversees the company's business strategy and operations as well as revenue and go-to-market teams. Access to real-time financial data is essential for improving consumer financial outcomes, particularly in areas like personal financial management and lending. The partnership aims to give consumers visibility into their spending, save for a home, apply for a mortgage or personal loan, and much more. Plaid will power three core parts of the Rocket Companies ecosystem: asset verification in mortgage origination, personal financial management, and automating personal loan underwriting. This collaboration comes at a pivotal time as open banking and a consumer's right to manage and share their financial information is secured in the finalized Dodd-Frank Section 1033 rule. By enhancing opportunities and outcomes for millions of people who rely on Rocket's ecosystem of products, Plaid and Rocket are helping people live healthier financial lives.

The Consumer Financial Protection Bureau (CFPB) has released a significant rule on consumer data rights, affirming open banking in the United States. This rule ensures that more consumers have the right to securely access and control their financial data. Plaid is supporting customers through this regulatory shift by offering solutions for authorization and data management, record retention, and risk management, which align with the final rule. The company has also launched its FDX-aligned Open Finance Solution suite, a set of free tools that enable financial institutions to more easily migrate to API connectivity. Plaid is committed to an open finance future that expands across consumers' financial lives, and this rule will serve as a catalyst for choice and competition in the industry.

Introducing Investments Move, a new product designed to streamline the process of transferring investment holdings between financial accounts without selling securities and incurring taxes. Already used by fintech brokerages like Robinhood, Frec, and Public, Investments Move employs Plaid's account linking experience familiar to over 100 million consumers. It simplifies the data collection process for Automated Account Clearing and Transfer Service (ACATS) in the US, reducing manual processes, increasing conversion rates, and decreasing support tickets. By providing source-of-truth data from brokerages on both sides of a transaction, Investments Move allows companies to take action to stop rejections before they happen, leading to more assets under management over time.

Plaid has launched its Gateway Partner Program, aiming to drive open banking compliance in the financial services industry. The program addresses the urgent need for scalable and streamlined solutions to meet regulatory standards set by Section 1033 rule. Partners of the program have been vetted for their ability to rapidly implement FDX-aligned APIs and integrate with Plaid's network, ensuring a smooth transition to compliance requirements across all third parties and use cases. The partnership with Ninth Wave as the inaugural preferred gateway partner aims to bring together secure connectivity and scalable compliance, enabling financial institutions to not only meet but exceed Section 1033 demands. Plaid's commitment to building a secure and scalable partner program underscores its vision for an open, transparent financial system that benefits all.

Plaid, a leading provider of financial data platforms, has introduced two significant updates to its Identity Verification feature: `fraud calibration` and the introduction of a new metric called the `Trust Index`. These features aim to improve the effectiveness of identity verification in detecting and preventing fraudulent activity. The new `fraud calibration` system allows users to easily label sessions as fraud or not, helping to refine Plaid's algorithms and deliver protection tailored to their business needs. Additionally, the `Trust Index`, a holistic picture of each user, provides a comprehensive view of the risk factors for each individual, enabling businesses to make informed decisions about user verification. The updates are designed to help companies onboard more users while fighting fraud effectively across the entire customer journey, and Plaid plans to release further features in the coming months.

Plaid has announced new product enhancements for its Consumer Report, which aims to make cash flow data more actionable than ever. The report includes network insights that reduce risk, a primary account indicator, and notifications of changes in an applicant's cash flow and financial stability. These features leverage unique credit risk signals from the largest open finance network, providing differentiated risk signals complementary to traditional credit and cash flow data. Additionally, customers can now get pre-calculated insights pushed to them on changes to borrower income and loan exposure after the initial credit decision, allowing for proactive servicing of their clients.

Pay by Bank for Bill Pay is a new payment solution designed to provide a seamless, cost-effective, and secure way for consumers to pay directly from their bank accounts. The Plaid network powers this solution, enabling higher adoption rates and up to 40% lower processing costs compared to card payments. With intelligent risk assessment, the system minimizes returns and prevents fraud. Pay by Bank for Bill Pay is already in use by early customers across various industries such as telecommunications, property management, insurance, and automotive. This solution aims to increase adoption of bank-based payments for recurring payments, offering more flexibility to consumers and greater savings for businesses.

Plaid has introduced Layer and Consumer Report, a solution that combines instant onboarding with cash flow data for lenders to evaluate alongside traditional credit data. This integration enables borrowers to instantly link their financial accounts and provide income, expenses, and bank account balances directly to lenders at the beginning of the application process. MoneyLion is the first customer to use this solution, allowing its 17 million users to access real-time cash flow data during loan applications and pre-qualification. The integration helps lenders make more informed decisions and expands their reach to underserved borrowers.