Wells Fargo & Co and data aggregator Envestnet Yodlee said on Thursday they had signed a data exchange agreement, the latest move in an ongoing tug of war between fintechs and large banks over information sharing.
The deal will enable the bank’s customers to share their account information with fintech apps connected to Envestnet Yodlee.
Wells Fargo and other large U.S. banks have been pushing to move fintechs and data aggregators away from so-called screenscraping and towards what they have said is a more secure method of accessing sensitive data. Through screenscraping, fintechs collect information by logging into a user’s bank account on their behalf.
“This is a significant milestone, we now have 99% of current third party app screenscraping under data exchange agreements,” said Ben Soccorsy, senior vice president in Wells Fargo’s strategy, digital and innovation group.
Fintech startups, such as those providing automated wealth management or budgeting tools, often need to connect to a user’s bank account to gather the necessary data to provide their services. Some collect the information through aggregators such as Yodlee and competitor Plaid, while others request that customers provide their password to access their information.
Through Wells Fargo’s new method, fintechs will not be able to use customers’ passwords to access their entire financial data, but will instead connect to the bank’s application programming interface, a set of programming code, that will only send specific account information authorized by the consumer.
The changes come as banks and fintechs scuffle over data access. Banks have said their reluctance to share customer information with third parties reflects a need to protect sensitive data. Fintechs have expressed skepticism, suggesting that consumers should decide who can access their data.
Soccorsy declined to say whether Envestnet Yodlee would be paying Wells Fargo for access to customer-permissioned data and said the bank could not disclose the details of any of these agreements as the terms are confidential. Envestnet Yodlee also declined to comment on the agreement’s terms.