JPMorgan Raises Concerns Over Fintech Middlemen Like Plaid Straining Its Systems

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., spoke at the Institute of International Finance (IIF) during the annual meetings of the IMF and World Bank in Washington, DC, US, on Thursday, Oct. 24, 2024.

JPMorgan Chase has raised concerns about fintech middlemen flooding the bank's systems with unnecessary data requests. An internal memo revealed that aggregators are accessing customer data multiple times daily, even when the customer is not actively using the app, causing a significant strain on the bank's systems.

Out of 1.89 billion data requests in June, only 13% were customer-initiated for transactions. The majority of requests were for various purposes such as improving products, preventing fraud, and data harvesting for sale.

JPMorgan is considering imposing new fees on these middlemen to cover the rising costs of maintaining their systems. Negotiations are ongoing, and the fees could be implemented as early as October.

This move could disrupt the fintech ecosystem that relied on free API access from aggregators like Plaid and MX to connect traditional banks with newer financial services. The landscape shifted in May after regulatory changes that impacted the open banking rule.

After the Consumer Financial Protection Bureau supported a banking industry lawsuit to end the open banking rule, JPMorgan's CEO called for resistance against what he deemed unfair regulations.