Plaid Woos Banks With New Instant Account Update Feature

Plaid is doubling down on its push to connect banks to FinTechs and their customers with a new, instant account update feature.

The San Francisco-based FinTech has built its business by helping consumers connect various apps and services to their bank accounts through its universal API (application programming interface), software that allows a pair of applications to communicate with each other.

In May, Plaid launched a push to build out the corporate side of the business with the launch of Plaid Exchange. With that offering, banks and other financial institutions (FIs) can build out their own APIs, making it far easier to connect with FinTech app developers and firms and their growing legion of users.

On Tuesday (Sept. 1), Plaid rolled out a major upgrade to its new bank- and institution-focused service, enabling banks and their FinTech partners who connect on Plaid Exchange to offer instant account updates to their customers.

“Instant account activity … allows institutions on Plaid Exchange to send user-permissioned transaction data to authorized Plaid developers within seconds of a user’s activity,” wrote Jesse Dhillon, a Plaid product manager, in a blog post. “This allows users to have a consistent, up-to-date picture of their finances when they use apps powered by Plaid.”

The new service has won an early endorsement from another FinTech. Branch, which offers a mobile digital wallet pitched at hourly workers, served as a Beta partner for Plaid’s new, instant account update service.

Plaid contends that the rapid updates should prove particularly helpful to hourly workers, especially in the lean times that have followed the COVID-19 pandemic, as users struggle to balance various expenses amid uncertain cash flow.

“Instant, real-time data has become standard for consumers today, and it’s a critical piece of information that our users need to make sound financial decisions,” said Branch CEO Atif Siddiqi in a press release put out by Plaid. “Plaid provides our users with the most current picture of their transaction history, empowering their daily financial decisions.”