JPMorgan: US banks to adopt standard API

The US retail banking space will see a market-led move towards a standard API according to JPMorgan’s managing director of digital platforms, Paul LaRusso.

According to LaRusso, the motivation for banks and organisations to adopt a standard API will be consumer driven.

“In the US we’ve taken a market-led approach and we’re collaborating across the industry to further this effort around greater control and visibility for customers,” says LaRusso.

“I think there’s value there for customers. Financial applications help customers make smarter decisions about their money whether it’s a budgeting app or small business accounting app … So I think there is a good reason why companies would join, and then a standard API allows companies to know what to expect through API calls and allows companies to integrate and deploy quicker to the customers.”

LaRusso would not speak on the financial motivations for adopting a standard API, repeating that for JPMorgan the impetus is to provide customers with greater visibility and control of their data.

The bank is a member of the Financial Data Exchange (FDX), an organisation aiming to unify the financial industry around a standard API.

JPMorgan recently announced that it would ban fintech apps from using customers’ passwords to access their bank accounts. Fintechs Plaid and Yodlee have agreed to use the bank’s tokens, allowing them access to limited customer data. The process of sharing customer passwords between banks and apps, known as screen scraping, is still a common practice among businesses to provide seamless experiences for customers. In September, the UK’s Financial Conduct Authority (FCA) agreed to an adjustment period until March 14, 2020 to allow third-party providers (TPPs) to continue to use screen scraping.

“We’ve signed data access agreements with a number of leading aggregators and fintechs including companies like Finicity and Intuit … So we do see progress with alignment with a number of companies in the space, and we’ve actually already deployed solutions to our customers today,” says LaRusso.

“I’ve seen a number of different companies join the FDX of different sizes, so I do see interest in adoption from different types and the organisation is open to all types of companies. It is an implementation and implementations do take time, but I do see alignment and interest from many different organisations as we can kind of point to of companies who have joined FDX.”

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