Fiserv, Plaid partner on consumer bank-data sharing
Fiserv has established a broad new partnership with Plaid that aims to eliminate friction that customers of smaller financial institutions often experience when sharing bank account data with third parties like Venmo, Cash App and Robinhood.
The pact will use application programming interfaces to directly connect customers at more than 3,000 financial institutions using Fiserv's core banking platform with Plaid's roster of more than 8,000 third-party applications and services, the companies announced Thursday.
The move will be a leap forward for community banks and credit unions on Fiserv's platform that may have previously relied on screen scraping and other indirect methods to verify or share account data with popular third-party apps, said Matt Wilcox, president of digital payments at Fiserv.
"We think the scale of this agreement is unprecedented in the industry, and it gets us out in front of open-banking standards that are coming, by introducing a consistent and secure way for customers to share data with third parties with no password-sharing," Wilcox said.
The pact builds on AllData Connect, the firm's proprietary process for validating end-user credentials accessible via API to third parties. Fiserv rolled this out in 2020.
Fiserv has been working on its deal with Plaid with some urgency, Wilcox said, propelled by the Consumer Financial Protection Bureau's data-sharing rule around open banking, which is expected to be finalized next year to meet a requirement of section 1033 of the Dodd-Frank Act.
The ability to eliminate screen-scraping for millions of consumers and thousands of financial institutions has been on Plaid CEO Zach Perret's wish list since the end of last year.
"Our deal with Fiserv is a big milestone for the industry because of the ability to move 3,000 institutions into the future of open banking with one integration," said Aly Yarris, a financial access partnerships leader at Plaid.
Fiserv will grant Plaid API access to client customer data immediately, and in coming weeks the Brookfield, Wisconsin-based firm will go live with individual institutions, beginning with 100 institutions that have already begun the process, Wilcox said.
"Consumers will be able to go into their online banking portal and see all the third-party apps that want permission to their data, and say 'yay' or 'nay' there," Wilcox said.
Fiserv also works with other data-aggregator fintechs including Akoya, Finicity and MX, Wilcox noted. These relationships provide access to third parties and technologies that may not be integrated with Plaid.
Altogether, these pacts bolster Fiserv's expanding open-banking capabilities, including the potential for merchants to enable consumer payments directly from their bank accounts, he said.
"If Plaid is powering an application that's doing some form of Pay by Bank services, Fiserv can do that authentication directly and connect to other payment rails like FedNow," he said.
Earlier this year, Walmart signed a deal to extend Fiserv's Pay by Bank services to consumers for real-time settlement of certain, not-yet-specified types of transactions.
