The (Pin)wheel is turning for open finance

By Isabelle Castro Margaroli

Today we start the day with news of a momentous?partnership?between open finance network, Plaid and payroll data providers, Pinwheel and Atomic.?

Their timing is impeccable.?

The?CFPB announced in June?that it would be developing a new personal financial data rule, slated to be finalized by 2024. The rule will primarily eliminate friction when consumers want to change bank accounts.?

Like many fintechs, Plaid, Pinwheel, and Atomic have had their sights set on reducing friction in the financial system for some time.?Perhaps that’s why fintechs lead the numbers of new account openings this year.?

But their coalition may mark a shift in power.?

With it, Plaid will have access to the payroll data of almost 100% of the US workforce (with their permission, of course) - enriching their Plaid Income product that allows lenders to verify borrowers' cash flow.?

Pinwheel and Atomic, on the other hand, will be extending their direct deposit account switching services to all of Plaid’s network - allowing for a multitude of customers to switch their direct deposit in seconds, a task that traditionally could have taken weeks.?

"Direct deposit of payroll is a major piece of the account-switching process. Many consumers will abandon a new account rather than risk making a mistake and missing a paycheck," said David Shipper, a strategic advisor with Datos Insights.

Suddenly, the idea of a more competitive financial system, with consumers calling the shots, doesn't seem so far away.

FEATURED

As more consumers shift deposits, Plaid lowers one hurdle

By Kate Fitzgerald, The data-aggregation specialist has teamed with two payroll tech firms to the streamline process of setting up direct deposit at a new bank, as more people move their accounts to obtain better rates.

SPONSORED

AI Perspectives: Transaction Fraud

By brighterion by Mastercard,?Do you know how financial institutions are addressing the broader challenge of detecting and preventing fraud? Download the report below for the latest insights.

FROM FINTECH NEXUS

IMF praises Digital Real, Brazil’s CBDC expected for 2024

By David Feliba,?The IMF said Brazil's Digital Real could reap the benefits of blockchain technology and compete with privately-issued stablecoins.

PODCAST

?The Fintech Coffee Break – Jonas Gross, The Digital Euro Association

This week Isabelle sat down with Jonas Gross from the Digital Euro Association to talk about Europe's development of a CBDC.

Listen Now

EDITORIAL CARTOON

UPCOMING EVENTS

?AFC Policy Summit 2023

The Summit serves as a pivotal gathering for industry leaders and policymakers to exchange ideas, explore

See Details

WEBINAR

?Balancing fraud prevention and customer experience: The power of phone numbers in Latin America.

Aug 30, 4pm EDT

Evolving fraud schemes represent a growing threat to all businesses that leverage the digital world for customer acquisition...

Register Now

ALSO MAKING NEWS

USA:?Stuck between a rock and a hard place: The debt landscape in America

• Household debt is on the rise, increasing $16 billion in Q2 2023, which was a 0.1% change from Q1. Meanwhile, credit card debt has broken records hitting $1 trillion according to the Federal Reserve Bank of New York.

Europe:?Adyen H1 results wipe EUR12bn off market value

• Shares in Adyen plunged by 28% on Thursday as the payments processor reported disappointing revenue growth and defended an expensive recruitment drive.

USA:?Wall Street Turns to AI to Solve WhatsApp Compliance Nightmare

• The Securities and Exchange Commission’s latest crackdown on Wall Street bankers and traders’ use of encrypted apps is sparking interest in whether large-language models and other artificial intelligence tools can catch Wall Street workers talking in code about something they shouldn’t be—or switching to an encrypted app to continue a conversation.

USA:?Securitize Agrees to Buy Crypto Wealth Manager Onramp to Expand RIA Services

• The acquisition is expected to close in the coming days and terms of the transaction have not been disclosed.

USA:?Banks' AI use guzzles power, but tech can reduce the impact

• Software can help banks move computing workloads to geographic regions where clean energy is available.

UK:?A Tough Summer For Open Banking Powered Lenders

• These closures signal a challenging summer for open banking-powered lenders, ultimately impacting the underbanked population in the UK.

LatAm:?Armed with new execs, dLocal rebounds from a short seller attack in a big way

• Uruguayan fintech company dLocal saw its stock surge by over 30% on Wednesday on the news that the payments outfit had tapped former Mercado Libre CFO Uruguayan payments company dLocal saw its stock surge this week on the news of a new co-CEO and that it had beat earnings estimates.

Global:?Signal: SEC crypto crackdown may be having unintended effect

• The 19 coins classified as securities by the SEC in June have seen an uptick in trading as bitcoin stabilises.

USA:?What Small Businesses Want from Mobile Banking Apps (But Don’t Get)

• Mobile banking apps for small business customers have a long way to go before they meet the expectations of users. Keynova Group checked out the functionality of apps from 10 of the largest banks in the country.