By Nathaniel Popper
The big banks and Silicon Valley are waging an escalating battle over your personal financial data, including the amount you spent on dinner last week and how much you are paying for your mortgage.
Technology startups like Mint and Betterment have been building services that pull together your bank account and credit card records — after you supply the passwords.
But now big banks are making a concerted push to set new restrictions on how technology companies can get access to this personal financial data, in some cases refusing to pass along information like the fees and interest rates they charge.
Banks like JPMorgan Chase and Wells Fargo say they want to give consumers access to their data, but are seeking new rules in response to a lack of standards for how technology companies handle personal financial data.
“When you think about millions of customers handing over their bank account credentials to third parties, who currently have no real oversight or examination of their security controls, you start to understand why our members get pretty nervous,” said Jason Kratovil, vice president for government affairs for payments at the Financial Services Roundtable, which represents the largest banks.
The tech companies, in turn, complain that the steps being taken by banks will not lead to better security and are motivated, instead, by a fear that the data will allow the financial upstarts to offer better deals on loans and checking accounts.
William Harris, founder of Personal Capital, a San Francisco-based startup, thinks the problems with getting access to data from banks had grown worse over the last year. “It’s pretty clear the real intent of the banks is to limit this data because it puts their business model at risk,” he said.
The clash over personal financial data points to a broader recognition that personal digital records are among the most valuable currencies in the increasingly digital economy.
Corporations are eager to gain access to the digital trails that people leave behind to determine which products are marketed to what consumers and at what prices. The data—and who can have access to it—ultimately affects how much people pay for everything from a home loan to car insurance.
One of the primary companies that help move data between the banks and the startups is Envestnet Yodlee. The company said that in the last two months, several large banks had told it that it would lose access to at least some data in the near future if it did not agree to new restrictions on the data it is pulling.
Steve Boms, vice president for government affairs at Yodlee, said that “with data limitations you are hindering the ability of millions of consumers to save more and optimize their finances.”
JPMorgan is hoping to create a dashboard on its website where customers can choose to turn on or off the data flowing from the bank to any outside provider.
Right now, few rules or standards exist for how technology companies can use the data they collect from customers. It is also not entirely clear who would be held liable if a data breach at a service like Venmo or Mint led to financial losses for a customer.
“It is in everybody’s best interest to come to more robust arrangements, from a security perspective,” said Brett Pitts, head of digital for Wells Fargo Virtual Channels.
In January, both JPMorgan and Wells Fargo signed agreements with Intuit—the owner of Mint, TurboTax and QuickBooks—that will give Intuit more streamlined access to data from the banks, in exchange for new rules about how Intuit uses the data. In recent negotiations, including those with Intuit, Wells Fargo has asked to be paid by technology companies that want better access to its data.
The negotiations with Yodlee are particularly important because it is the largest data aggregator. In particular, the company has been criticized for taking the billions of credit card transactions running through its pipes and selling them to hedge funds and other investment firms. Yodlee has said that it scrubs the data of any personal information before it sells it to third parties.
© 2017 The New York Times
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