JPMorgan has pledged to eradicate fintech apps from using customer passwords to access bank accounts, as the finance giant seeks to strengthen data security.
As reported by The Financial Times, the firm is looking to move away from passwords and modernise security capabilities with the distribution of tokens that provide companies a smaller but efficient insight into customers.
In spite of a timeline not yet being set for the full implementation of the new system, the company has outlined its belief that it will phase out its collaboration with some fintech companies.
Furthermore, follows the 2016 statement by chief executive Jamie Dimon, who in a shareholder letter stated: “Many third parties sell or trade information in a way customers may not understand, and the third parties, quite often, are doing it for their own economic benefit, not for the customers.”
Christina Tetreault, policy counsel for Consumer Reports also emphasised to the FT: “Most of the digital financial products and services are take-it-or-leave-it transactions where consumers lack both meaningful notice about what is collected and where it goes.”
The token based system has however, already attracted some interest amongst fintech companies with Account aggregators Yodlee and Plaid already signing up to the new system.