JPMorgan says fintech middlemen like Plaid are ‘massively taxing’ its systems with unnecessary pings

## JPMorgan vs. Fintech: A Data Battle Brewing

JPMorgan Chase is taking aim at fintech companies that rely on data aggregators to access customer data, alleging that these companies are overloading its systems with unnecessary requests. This move could significantly impact the fintech landscape and the future of open banking.

Here’s a breakdown of the key points:

• Excessive Data Requests: JPMorgan claims fintech middlemen are bombarding its systems with data requests, far exceeding the number initiated by customers for actual transactions. In June, only 13% of 1.89 billion requests were transaction-related.
• Costly Infrastructure: The bank cites rising costs to maintain the infrastructure needed to handle the surge in data requests and increased fraud claims linked to fintech transactions.
• Fees on the Horizon: JPMorgan plans to charge fintech middlemen new fees for data access, potentially starting as early as October.
• Impact on Fintech: This move could disrupt the fintech ecosystem, which has thrived on free API access provided by banks.
• Open Banking Rule in Question: The situation is complicated by a legal challenge to the “open banking” rule, which mandated free data access.
• Fraud Concerns: JPMorgan reports that transactions involving data middlemen are significantly more likely to result in fraud claims.
• Plaid’s Role: Plaid appears to be the largest aggregator in terms of data requests, with a significant portion of its API calls not initiated by customers. Plaid disputes JPMorgan’s claims.
• Negotiations Underway: JPMorgan is negotiating with fintech companies to find a solution, with both sides acknowledging the need to adjust data request volumes.

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