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Who owns customer banking data? What does Plaid do, and how did it defect? Did JPMorgan Chase give up leverage? We discussed it all with Alex Johnson, and here are our favorite learnings.
The market has evolved around a simple principle: consumers have the right to share their data under Section 1033 of Dodd-Frank, and banks that fight this too hard risk losing customers. Even though banks technically own the data, trying to restrict customer access creates competitive disadvantages. This tension between legal ownership and practical control has shaped the entire open banking landscape in the US over the past 10-15 years. Banks learned they couldn't win by claiming ownership - the customer expectation was too strong.
Bank data sits in old legacy systems. That same data is critical for AI strategies, open banking, and the next decade of banking infrastructure. But core banking systems and loan origination platforms have little incentive to make that data accessible. There's no revenue upside for them in enabling better data flows. The result is massive investment in systems that consume banking data and minimal investment in systems that output it. For smaller banks, this creates a technical readiness gap they can't ignore. Many aren't prepared to support open banking mandates.
Plaid argued they were “just dumb pipes passing data along.” They're now regulated as a credit bureau. What changed? The shoebox argument. Print your statements, bring them to the branch - that's what lending used to look like. Plaid said they were just the digital version of that process. Except digitization at scale unlocks capabilities that didn't exist before. The speed, scale, and intelligence you can apply to digitized financial data creates new considerations.
JP Morgan introduced pricing for data aggregators to access their APIs. Plaid, the largest aggregator, agreed to pay rather than hold out with smaller competitors to collectively fight it. Alex calls this a classic prisoner's dilemma.
Major banks like Chase and PNC don't just dislike open banking on principle - they have actual beef with specific aggregators. Alex argues there are people at these institutions who genuinely don't like how certain companies operate, and that personal friction shapes billion-dollar decisions. When regulatory uncertainty around open banking hit, Chase saw an opening. They went aggressive and public, trying to force their preferred terms. But the move backfired. The backlash from fintech and crypto communities was loud enough to pull the CFPB back into the fight-exactly what Chase didn't want. If they'd waited just a bit longer, the original rule might have been thrown out entirely.
Chase was never trying to kill open banking. They were locking in the most favorable conditions so they could take advantage of it. While smaller banks hoped the big players would shut down open banking entirely, Chase was building cash flow underwriting tools and pay-by-bank systems for commercial customers. PNC, US Bank, and Capital One are doing the same. They're positioning themselves to “win” open banking.
Watch the full video below:
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Webinar Recap | Beyond Traditional Deposits: Strategic Opportunities with Stablecoins for Community BanksWho owns customer banking data? What does Plaid do, and how did it defect? Did JPMorgan Chase give up leverage? We discussed it all with Alex Johnson, and here are our favorite learnings.
The market has evolved around a simple principle: consumers have the right to share their data under Section 1033 of Dodd-Frank, and banks that fight this too hard risk losing customers. Even though banks technically own the data, trying to restrict customer access creates competitive disadvantages. This tension between legal ownership and practical control has shaped the entire open banking landscape in the US over the past 10-15 years. Banks learned they couldn't win by claiming ownership - the customer expectation was too strong.
Bank data sits in old legacy systems. That same data is critical for AI strategies, open banking, and the next decade of banking infrastructure. But core banking systems and loan origination platforms have little incentive to make that data accessible. There's no revenue upside for them in enabling better data flows. The result is massive investment in systems that consume banking data and minimal investment in systems that output it. For smaller banks, this creates a technical readiness gap they can't ignore. Many aren't prepared to support open banking mandates.
Plaid argued they were “just dumb pipes passing data along.” They're now regulated as a credit bureau. What changed? The shoebox argument. Print your statements, bring them to the branch - that's what lending used to look like. Plaid said they were just the digital version of that process. Except digitization at scale unlocks capabilities that didn't exist before. The speed, scale, and intelligence you can apply to digitized financial data creates new considerations.
JP Morgan introduced pricing for data aggregators to access their APIs. Plaid, the largest aggregator, agreed to pay rather than hold out with smaller competitors to collectively fight it. Alex calls this a classic prisoner's dilemma.
Major banks like Chase and PNC don't just dislike open banking on principle - they have actual beef with specific aggregators. Alex argues there are people at these institutions who genuinely don't like how certain companies operate, and that personal friction shapes billion-dollar decisions. When regulatory uncertainty around open banking hit, Chase saw an opening. They went aggressive and public, trying to force their preferred terms. But the move backfired. The backlash from fintech and crypto communities was loud enough to pull the CFPB back into the fight-exactly what Chase didn't want. If they'd waited just a bit longer, the original rule might have been thrown out entirely.
Chase was never trying to kill open banking. They were locking in the most favorable conditions so they could take advantage of it. While smaller banks hoped the big players would shut down open banking entirely, Chase was building cash flow underwriting tools and pay-by-bank systems for commercial customers. PNC, US Bank, and Capital One are doing the same. They're positioning themselves to “win” open banking.
Watch the full video below:
Want to stay ahead of what’s next in compliance?
Subscribe to our blog to hear directly from the people shaping the future of risk and regulation.
For more information on how Cable can automate testing of regulatory controls and dynamic risk assessments, contact Cable today for a demo.
