Echoing across the fintech world, news broke today that Plaid will pay JPMorgan Chase for their customers’ data.
“The data access agreement will continue the long relationship between the two companies, who have helped lead their industries in connecting consumers to their banking data. The agreement, which includes a pricing structure, outlines a series of commitments that JPMC and Plaid made to ensure that consumers can access their data safely, securely, quickly and consistently into the future. The firms will also work through innovation and technological investment to improve data access,” the release said. No additional details on pricing structure or fees were disclosed.
The backstory: Earlier this year, JPMorgan’s intent to charge for customer data ownership sent shockwaves through the fintech world and poured cold water on the momentum around the future of open banking, with advocates pushing back hard.
Will Plaid’s decision be enough to stop the barbarians at the gate? And what is the future of open banking?
In a statement, the Financial Technology Association (FTA) said “This development underscores the anti-competitive ability of the nation’s largest banks to set a new market floor during a period of regulatory uncertainty. It demonstrates the urgent need for action to protect the right of consumers to securely permission and share their financial data without costly fees. We maintain that these fees are prohibited under current law and statute, and believe they are anti-competitive and harmful to consumers. We continue to urge the CFPB to craft a 1033 rule that protects consumer data access and ensures a competitive, innovative, and accessible financial system.”
And news from the crypto realm: Digital asset treasury (DAT) firm FG Nexus — no affiliation to us — announced that it received shareholder approval for a trillion-share authorization. DATs use a strategy made famous by Bitcoin evangelist Michael Saylor through his company MicroStrategy, which involves buying up cryptocurrencies and offering the profits off these digital assets to company shareholders. Maja Vujinovic, FG Nexus CEO of Digital Assets, told Fintech Nexus that the company’s “core treasury asset” will be the cryptocurrency Ethereum, but the company may “evolve” its strategy over time.
Vujinovic said issuing 1 trillion shares “strikes the right balance between flexibility and discipline,” but the big-sum announcement is designed to make a splash and help the company stand out among the 124+ firms that have rushed to adopt a DAT strategy since the beginning of the year. Just two weeks ago, Nasdaq announced new rules that would require shareholders to vote to approve the purchase of cryptocurrencies in certain cases, suggesting institutional pushback to the proliferation of DATs.
There’s also the looming specter of the CLARITY Act, which is making its way through Congress and may institute guardrails around crypto market participants. “We’re not waiting for Congress to act: We’re applying the highest existing public-company guardrails, plus an added layer of crypto-specific risk oversight,” Vujinovic said.
Speaking of clarity, today we shine a spotlight on the fintechs fighting fraud, from our conversations on the sidelines of the annual Finovate conference in New York.
–The Editors
