(Reuters) -JPMorgan Chase has secured deals that will ensure it receives payments from fintech companies for access to its customer bank account data by third-party apps, CNBC reported on Friday, citing sources familiar with the matter.
The agreements were struck with data aggregators including Plaid, Yodlee, Morningstar and Akoya, Drew Pusateri, a JPMorgan Chase spokesperson, told Reuters.
Data aggregators are intermediaries who link banks with fintech firms. They previously accessed customer account data from banks such as JPMorgan without paying for it, enabling fintech apps to offer services like budgeting and payments – an arrangement that drew criticism from lenders concerned about data security and fair compensation.
“The free market worked. After productive conversations with our aggregator and fintech partners, we’ve come to agreements that will make the open banking ecosystem safer and more sustainable – and allow customers to continue reliably and securely accessing their favorite financial products,” Pusateri added.
The deals follow weeks of talks between the largest U.S. bank and the aggregators, with JPMorgan agreeing to a lower fee than initially proposed and fintech intermediaries securing concessions on how data requests are handled, the CNBC report added.
The Consumer Financial Protection Bureau’s (CFPB) “open banking” rule, introduced last year under the Biden administration, set standards for data sharing between fintechs and banks, enabling consumers to move personal financial data between providers at no cost.
Banks, facing potential losses, swiftly criticized the rule, arguing it risked consumer data security and overstepped the agency’s authority, while fintech firms welcomed it, saying it would enable secure sharing of consumer data.
The CFPB kicked off a do-over of its “open banking” regulations in August, amid public pressure from fintech firms and crypto entrepreneurs.
The Trump administration had initially sided with a banking industry call to scrap the regulations entirely, claiming they exceeded the agency’s legal powers, before changing tack earlier in the year, citing “recent events in the marketplace.”
(Reporting by Pritam Biswas in Bengaluru; Editing by Maju Samuel)
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