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JP Morgan to charge fintechs for customer data

Fintechs wanting access to banks' customers' data may have to pay for the privilege, according to a report from Bloomberg on US bank JP Morgan.

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JP Morgan to charge fintechs for customer data

Editorial

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The report states that JP Morgan is planning to impose fees on companies wanting to access its clients' bank account data and has gone so far as sending pricing sheets to data aggregators - the intermediaries that link banks and fintechs.

According to the report, the pricing fees will vary by use case with firms from the payments sector likely to be charged the most. 

"We've invested significant resources creating a valuable and secure system that protects customer data," stated a JP Morgan spokesperson featured in the Bloomberg report. 

"We've had productive conversations and we are working with the entire ecosystem to ensure we're all making the necessary investments in the infrastructure that keeps our customers safe."

The fees are slated to be imposed later this year, subject to negotiation. 

Should they take effect, it would be a significant disruption to payment processing platforms and other fintechs that rely on free access to customer data. 

Banks are currently pushing for lighter regulation under the current regime in the US. However, it is less clear whether the same step would be allowed in other jurisdictions, especially the EU where free access is a key part of the open banking principle.

It is a similar scenario in the UK where the government has just issued the Data (use and access) Bill which is designed to support the expansion of open banking by enabling users to share their data with a wider range of third-party providers. 

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Comments: (1)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Kudos to JPMC. As I've been saying for a long time, banking data is the exhaust of customers' transactions with a bank and does not belong exclusively to the customer. Open Banking forced banks to hand it over to fintechs and, that too, for free. There are no similar laws compelling companies in other industries to hand over their data exhausts to third parties - either for free or at a price. I see no reason why it should be any different in the banking industry. Now that JPMC has shown the way to fight this injustice, I'm guessing other banks will follow suit.

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