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Jamie Dimon, Chief Executive Director of JPMorgan Chase & Co., at the Institute of International Finance (IIF) during the annual IMF and World Bank meetings in Washington, USA, Thursday, October 24, 2024.
Kent Nishimura | Bloomberg | Gets the image
Jpmorgan chase Said Fintech Sildlemen – companies that helped the new generation of financial applications contact the traditional accounts check – pour the bank’s system systems.
“Aggregators gain access to customer data several times a day, even if the client is not actively using the app,” JPMorgan System wrote last week Melissa Felder. “These requests for access to the taxes of our systems.”
Of the 1.89 billion data requests from the intermediaries in JPMorgan in June, only 13% were initiated by the customer for transactions, Memo reports.
Most of the data known as API calls were for the sake of helping Fintech’s assistance to improve their products or prevent fraud with other efforts, including sale data harvesting, said a person who knows a memo who refused to identify between JPMORGAN and Fintechs.
Jpmorgan, the largest American bank on assets, is preparation In order to collect new payments for access to the systems, which, he said, are increasingly expensive for maintenance. Negotiations between JPMORGAN and Fintech Sildlemen are ongoing, but new fees may begin in October, they said that people who know the case.
Moving the bank can lead to upset in Fintech ecosystem, which flourished as aggregators, including Evolve and Mx related to traditional banks with new arrival. Access to API has been free for years, which allowed intermediaries to profit from the sale of connection to Fintechs, which in turn offered accounts without checking and trading services.
The situation changed in May after the Consumer Financial Defense Bureau filed a petition in support the banking industry lawsuit Seeking to complete the so -called “open bank” rule.
This rule is finalized by the CFPB of the Biden era in the famous months of this administration, appointed that banks were to provide the authorized parties for free. A week after adopting the rules, CEO JPMorgan Jamie Dimon called on bankers ”Behind back“Against what he said were unfair rules.
Big volumes
News this month that JPMorgan planned to charge from customer data, first reported Bloomberg, have led to accusations of venture capital investors and Fintech and Crypto executives that JPMorgan was engaged in “anti-component, Lease Behavior ”by setting paid walls to customer data.
But JPMorgan says it has an increase in the cost of maintaining the infrastructure required for a surge in volume, as well as increased claims against payments made in the Fintech ecosystem.
The total API call volume received by JPMorgan has doubled over the past two years, the memo reports.
According to the memo, the transactions related to the money are aimed at electronic operations for ACH, 69% more likely that they lead to a fraud application when they have drawn the data intermediaries.
JPMorgan noticed about $ 50 million in fraud with ACH operations initiated through the aggregators, the figure that the bank is three times for 5 years, the report said.
Among the 13 Fintech companies, tracked in the bank’s memo, more than half of June, with 1.08 billion API requests, received one company. Although the firms are not named, CNBC has learned that the largest player presented in the data Evolve.
JPMORGAN data shows that customers were initiated only 6% of API Plaid calls.
Co -founders PLAD WILLIAM HOCKEE AND ZACH PERRET
Source: Flad
Providing access
The fruit stated in a CNBC statement that the figure is “incorrectly provided how to access data,” because all the activity begins when customers provide permission to Fintech company when they sign up for accounts. Of course, many clients do not carefully read the long “conditions” conditions that contain disclosure of data allocation before the opening of new accounts.
“API Bank call, if the user is not present after they allowed the connection, is a standard industry practice that is supported by all major banks so that consumers receive critical alerts for overdraft or suspicious activity,” the CNBC played.
The play also stated that JPMorgan’s claims about higher fraud between the aggregators are “misleading”, although it was not specified.
“Not surprisingly, the volume of access to the data increases with the demand of consumers to reasonable, faster and more considering their needs,” the played said.
“To be understood, we believe that it is important that the data exchange ecosystem works for all, including consumers, Fintech and financial institutions – many of which use open bank business in their products,” the company said.
Offered boards schedules common JPMorgan 300 million dollars In new annual fees, according to the Forbes report.
The rest of the companies that trace the JPMorgan document are much smaller; Only four other mediators have registered more than 100 million monthly API calls.
Distribution of application
If the “Open Banking” rule is bidden’s era, the main question is not whether the mediators should pay for the data, but how much they will have to pay.
The back between JPMorgan and Sildlemen is a private process that is poured into a public outlook to achieve a new reality acceptable to everyone.
JPMORGAN has conducted productive conversations with multiple data aggregators that can change the way they pull the data when they are no longer released, according to the person who knows the negotiations.
“I think both sides fully admit that there are things they can do for the correct size call,” the man said.
