In a pioneering move towards seamless data sharing, Fiserv and Plaid have joined forces to eliminate barriers for customers of smaller financial institutions when connecting their bank account data to popular applications like Venmo, Cash App, and Robinhood. This innovative partnership announces a significant leap forward for community banks and credit unions that previously relied on indirect methods for data exchange.
The collaboration will see Fiserv's core banking platform directly integrate clients from over 3,000 financial institutions with Plaid's extensive network of over 8,000 third-party applications and services, leveraging robust application programming interfaces (APIs). This integration, powered by Fiserv's AllData Connect, an API-accessible credential validation mechanism launched in 2020, offers a secure and consistent means for customers to share data with third parties without the need for password sharing.
Matt Wilcox, Head of Digital Payments at Fiserv, emphasized the unprecedented scale of this agreement in the industry, positioning them ahead of forthcoming open-banking standards. Wilcox stated, "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."
This strategic move also aligns with the upcoming Consumer Financial Protection Bureau's data-sharing mandate for open banking, slated for approval next year under Section 1033 of the Dodd-Frank Act. Plaid's CEO, Zach Perret, has long sought to eliminate screen scraping for millions of consumers and thousands of financial institutions. Aly Yarris, Head of Financial Access Partnerships at Plaid, hailed the partnership as a monumental milestone for the industry, enabling 3,000 institutions to transition seamlessly into the future of open banking through a single integration.
Fiserv will promptly provide Plaid API access to client customer data. Over the next few weeks, the Brookfield, Wisconsin-based firm will roll out the integration with individual institutions, commencing with the initial 100 institutions that have initiated the process. Wilcox detailed that consumers will have the autonomy to grant or deny permission for third-party apps to access their data via their online banking portal.
Fiserv already works with data-aggregator fintechs like Akoya, Finicity, and MX. These partnerships improve their open-banking capabilities even more, making it easier for stores to accept payments from bank accounts. In addition, this partnership positions Fiserv to authenticate Pay by Bank services directly and connect to various payment rails, such as FedNow.
Earlier this year, Walmart and Fiserv extended Pay by Bank services to consumers, enabling real-time settlement for a range of transactions. This groundbreaking alliance between Fiserv and Plaid not only streamlines data sharing but also signifies a pivotal step towards shaping the future landscape of open banking.