JPMorgan Chase & Co. is giving financial technology companies until July 30 to sign new data access agreements with the bank or they will be denied access to customer information, Reuters reported, citing people familiar with the matter.
JPMorgan already has agreements covering more than 95% of data access requests, said Reuters, citing a spokesman of the bank.
As part of the deal, fintechs must also agree to a "concrete plan" to transition to a new method of gathering customer data that limits fintechs' access only to information authorized by the bank's customers, the sources told Reuters.
Allowing fintech apps and services to use bank customers' data to link their bank accounts has become a point of tension in recent months. In December 2019, PNC Financial Services Group Inc. customers found their bank accounts suddenly unlinked from the payments app Venmo LLC, which is owned by PayPal Holdings Inc.
JPMorgan Chairman and CEO Jamie Dimon and other bank executives have spoken about the need to restrict third-party apps' access to bank customer information except through the bank's own application programming interfaces, or APIs, and through agreements with individual third-party apps.
"We hope through time, that is exclusively the only way that third parties can access our customers' data," CFO Jennifer Piepszak said during JPMorgan's fourth-quarter 2019 earnings call.
That data will be only what the customer agrees to share with the third party, Dimon added during the call.
"There's not unlimited access to customer data. And the customer will have the ability to turn it off," he said. "As opposed to today, if you gave your bank passcode to someone, they're taking the data every day, maybe even every minute, and you don't even know about it because you forgot."