Sensing an opportunity in the small business credit card market, Stripe is setting out to outflank big banks by offering APIs to enable its clients to issue their own physical and virtual credit cards.
Banks should more widely adopt application programming interfaces for sharing customer data with third parties because it's the best approach to ensuring information stays safe.
Rather than ban screen scraping, financial institutions should improve secure account connectivity so that consumers can share data with the apps they want to use.
Whatever the reason that Plaid, a prominent data aggregator, can no longer access data from Capital One, the situation demonstrates how fragile fintechs are when they lose banking access.
The widely held belief that application programming interfaces are the key to banking’s future rests on the many ways early adopters are experimenting with the technology. But security and privacy concerns are still leading many in the industry to hold back.
The self-regulatory body says working with data aggregators increases risk of cyber fraud, unauthorized transactions and identity theft. But aggregators say other links in the information chain are more vulnerable.
