JPMorgan Plans to Charge Fees to Fintechs to Get Customer Bank Account Data

After Bloomberg News revealed that JPMorgan was planning to charge fintechs to access their customer bank account data, CEO Jamie Dimon was questioned about this during the bank’s latest quarterly earnings call. Dimon said that this was a customer-driven decision designed to protect them.

“So we think the customer has the right to if they want to share their information. What we ask people to do is do they do they actually know what’s being shared? What is actually being shared? It should be everything. It should be what their customer wants. It should have a time limit because some of these things went on for years. It should not be remarketed or resold to third parties. And so we’re kind of in favor of all that done properly.

And then the payment, it just costs a lot of money to set up the APIs and stuff like that to run the system protection. So we just think it should be done and done right. And that’s the main part. It’s not like you can’t do it. The last thing is a liability shift. I don’t think JPMorgan should be responsible if you’ve given your bank passcodes to third parties who market and do a whole bunch of stuff with it, and then you get scammed or fraud through them, they should be responsible. And we want real clarity about that. And if you see today, lot of these scams and frauds run through third party social media and stuff like that, there should be a little more responsibility on their part so we could all do a better job for the customer. That’s why.

There’s a debate brewing as to whether or not this move is actually designed to serve the customer. The American Fintech Council (AFC), for example, said that it’s actually designed to accomplish the opposite and that it would hurt consumers and borrowers alike.

“Consumers have a right to their own financial data, full stop,” said AFC CEO Phil Goldfeder. “Any effort to restrict or monetize access to consumer-permissioned financial information is a direct threat to responsible innovation, healthy competition, and the progress we’ve made toward a more inclusive financial system.”

Just a few months earlier, Dimon hinted in a bank shareholder letter that such a move would be defensive and that a fight with the fintechs monetizing their data was on the horizon.

“Banks provide fantastic services, and it’s time to defend ourselves – in the public realm or in court if need be,” he said. “Now a new battle is brewing: Third parties want full access to banks’ customer data so they can exploit it for their own purposes and profits.”