Authentive

Do services like Plaid store your password when used to connect to your bank account? It’s nuanced so let’s break it down. Account connection providers like Plaid, Finicity, MX and many others started with screen scrapping to use your password and 2FA codes to login into your account and share your data with the app you used. Once connected to your account, they store your password to maintain continuous access, as explained in Plaid https://bit.ly/plaid-pwd and Stripe docs https://bit.ly/stripe-pwd. Although institutions have gradually made APIs available over OAuth, Plaid still relies on passwords for 80% of US institutions and 99% of Canadian institutions they support. So, if the institution you connected supports OAuth, your password is not shared or stored. But for the rest, these services still collect and store your password. To know which institutions are integrated with OAuth or not, I put together a dashboard for easy lookup. Check it out: https://bit.ly/plaid-insts The good news is that CFPB has proposed new regulations to accelerate the shift to open banking to move away from these risky data collection practices. The not so good news is that it will take years to fully materialize. https://bit.ly/cfpb-ob #OpenBanking #Privacy

The price we pay for trust, or lack thereof! Since 2021, the median cost of closing a mortgage has increased steadily, nearly doubling for lower-income borrowers seeking FHA loans. While costs are up for some services required to close a loan, credit and income verification fees have been rising the most and spiked again this year, as Greg shared in his post. https://lnkd.in/gFU6ytXt When you apply for a loan, lenders can’t trust any of the documents you submit due to the possibility of fraud. Lenders instead rely on data brokers to verify your credit score, income, assets, tax etc. But borrowers are on the hook for paying for the costs, you’d see this breakdown in loan closing disclosures. Lenders get hit even worse though. As borrowers, we shop at multiple lenders/brokers to get the best deal and they incur credit report fees for every estimate they provide. They cannot recoup this cost if the borrower decides to close elsewhere. Then, there are indirect costs like privacy and security compromises due to continuous data breaches at credit bureaus and locking out borrowers due to incorrect and missing data. Wouldn’t ensuring trust among borrowers and lenders be a better solution instead of paying third party verifiers billions of dollars each year? At Authentive, we are applying recent advancements in AI to build the platform to foster trust and reduce costs for millions of borrowers and thousands of lenders.