Plaid has partnered with identity provider Okta to help financial institutions accelerate Open Finance initiatives and adopt OAuth and APIs to exchange data with third parties. Following this collaboration, banks and financial services companies are enabled to build OAuth integrations and adopt secure API connectivity for US consumers in an expedited manner, thus offering the financial services ecosystem a safe way to have their Open Finance initiatives accelerated and ‘seamless’ connectivity delivered.

Partnership context and its impact on Open Finance Based on the information provided in the press release, Plaid carried out a survey with Harris Poll in 2022 which highlights that 75% of US-based consumers are in agreement that being able to connect bank accounts with digital finance apps and services is important. Having this connectivity enabled means making data exchange as simple and secure as possible, however, a multitude of companies are not yet leveraging innovative methods to improve security for consumers. Through this partnership, Plaid and Okta are set to offer integrations, education, and support to assist companies within the financial services industry with transferring data via OAuth (industry-standard protocol for authorisation that enables users with control over how their data is shared) and API solutions.

Such methods have no requirement for password exchange between parties, thus helping reduce the reliance on credentials and creating improved and increasingly secure experiences for consumers. As detailed in the announcement, customers have the option of integrating Plaid with Okta Customer Identity Cloud (powered by Auth0) to simplify and secure authentication, authorisation, and aggregation of shared data, all with the consumer’s consent. The announcement comes at a time when the financial services industry is moving towards OAuth adoption, an all-implementations requirement that is supported by the industry consortium Financial Data Exchange (FDX),  of which both companies are members.

As per the press release, this includes integrations facilitated by Core Exchange, the API data connectivity solutions that align with FDX specifications launched by Plaid in May 2022, and Okta’s first steps toward Open Banking. Aly Yarris, Financial Access Partnerships at Plaid stated that the company is aiming to unlock financial freedom for everyone. By partnering with Okta, Plaid aims to help financial services companies adopt OAuth integrations while simultaneously advancing API-based data connectivity solutions that offer consumers increased transparency, security, and control over their data.

This is believed to be a ‘win-win’ for consumers that have an expectation for both privacy and choice in how they manage their financial accounts for activities of the likes of payments, budgeting, and investing. Maureen Little, Vice President of Technology Partnerships at Okta advised that over 17,000 organisations leverage the company’s services to protect the identities of their customers and workforces, stating that their independent and neutral platform enables financial services companies to use identity best practices regardless of their tech stack and pass the security and experience benefits to their consumers. For more information about Plaid, please check out their detailed profile in our dedicated, industry-specific Company Database.

Additionally, you can also check the company’s contribution within The Paypers Report 2022: The Enablers of Open Banking, Open Finance, and Open Data for insights into variable recurring payments. .