JPMorgan Chase & Co warned financial technology companies that they will be denied access to customer information if they do not sign new data access agreement by 30 July. JPMorgan plans to stop using customer passwords to gather the data.
The U.S. bank sent a letter in late January to fintechs and aggregators with the new plan to collect customer data in a different way and a deadline until which they should sign or be denied access.
Up until now, the bank’s third-party provider (TPP) partners have had access to the data through customers own pass words. The new method JPMorgan will implement uses application programme interface (API) connection and will grant limited account information authorized by the consumer.
JP Morgan’s new method aims to protect sensitive customer information such as history of transactions and income. The bank has been trying to find an alternative method for the information sharing process for four years.
MD of digital platforms at Chase Paul LaRusso commented:
We’ve been working on this with aggregators and fintechs since 2016 because our secure API is the best way to help our customers make smart money decisions more easily and safely.
Fintechs have been skeptical about restrictions in the data sharing claiming the it should be up to consumers decide what companies can look at their information and not banks. Some believe that APIs are not as reliable and secure as people think they are. Dan DeMers, CEO of Canadian start-up Cinchy, noted that “even APIs create a spaghetti infrastructure” and can be vulnerable to security breaches.
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