JPMorgan Chase and the data aggregator Finicity have signed an agreement that will let the bank’s customers share their data with third-party financial apps — without disclosing their login credentials.
The companies will use an application programming interface to let Chase customers send the data to the apps Finicity supports, including personal financial services apps and income verification tools.
The companies said the agreement is a way to accomplish a few things: It protects consumers’ security and privacy, it helps consumers make smart financial decisions and it quickly delivers the most reliable data.
Signage is displayed outside of the JPMorgan Chase & Co. headquarters in New York, U.S., on Wednesday, Oct. 13, 2010. JPMorgan said profit rose 23%, exceeding analystsÕ estimates, as provisions for bad loans shrank. Photographer: JB Reed/Bloomberg
JB REED/Bloomberg
“Working with Finicity, we will enable our customers to make informed decisions while protecting their Chase banking credentials,” Bill Wallace, head of Chase digital banking, said in a press release announcing the partnership.
Chase struck a similar data deal with Intuit but this marks the first partnership with a data aggregator that powers many different kinds of apps.
The announcement comes as banks are evaluating data-sharing options and as the Consumer Financial Protection Bureau is exploring the very heated issue of data access. Some technologists believe screen scraping — where consumers grant access to their data by surrendering their credentials — is necessary so apps like Mint or Venmo can grab the financial data consumers want to share with or without investment from the banks. However, banks see sharing credentials as a serious security and liability risk and a scenario where customers won’t always know what app is pulling which data and for how long.
A handful of U.S. banks are moving ahead on developing APIs with individual technology companies. Earlier this year, Finicity also announced a similar partnership with Wells Fargo, a bank that also has API deals with Intuit and Xero. Bank of America said it is working with aggregators on data-sharing arrangements, while Capital One has announced several API deals with tech companies. The Center for Financial Services Innovation, meanwhile, is studying the potential collateral damage one-off data deals could cause the industry.
The Long Island bank is the latest financial institution to use new equity to restructure its balance sheet and unload low-yielding assets. Its stock price tumbled after the shares were priced at a considerable discount.
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