Was intrigued to read in the latest Fintech 🧠 Food that @Plaid has launched a beta product called My Plaid (http://my.plaid.com) that allows users to see which companies they are sharing their financial data with 🧐
Naturally, I wanted to take it out for a spin…
For now, it doesn't seem to have the capability to see which companies have access to data. You can only add accounts, like any personal finance app out there, and see an aggregated view of accounts.
So, nothing *too* differentiated for now 🤷🏽♂️
Where it breaks down potentially is that this will likely only work where the origin/destination of financial data uses Plaid APIs.
1. It goes beyond the scope of what data is available under Open Banking (mostly current accounts & credit cards)
2. It doesn't rely on a single, proprietary vendor like Plaid to work
In a way, I'm glad Plaid is doing this now because it demonstrates clear product-market fit and demand for digital identity services, that we *can* solve in a more efficient and privacy-preserving fashion @cheqd_io 👍🏽
There’s another side to this story of how ID fraud impacts some demographics disproportionately.
The burden of responding to the fallout of ID theft is squarely on the person whose ID is stolen.
Often, the person impacted isn’t even a customer of the financial institution where attempts have been made to open accounts, and therefore it’s low priority for those companies. happens to know the finance/fintech space, and had contacts that could elevate the customer support requests to higher-ups. Even then, he found the process challenging and slow.
I wonder how many hours of Jason’s time all this follow-up took 😔
At the best of times, I know many that find dealing with banks anxiety-inducing. If you up the stakes with potential future impact on credit scores etc, those stakes get raised.
Add the hurdles of paperwork, filing requests with police, waiting on hold on customer care
…and pretty soon, you start realising that banks have shifted the burden of this to:
– non-native speakers or immigrants – anyone with mental health conditions or anxiety issues – people who simply don’t have the time or patience (many of us)
I say this as someone who has generalised anxiety disorder and ADHD. I could deal with ID theft, since I know the fintech and ID verification space well enough to know how to even start unfucking the situation.
Many people don’t. And so they take the financial hit and move on. The reality is that a lot of fintechs/banks try to meet the bare minimum due diligence needed to open an account, and acknowledge that means there are some scammers in the mix.
They prioritise reducing barriers when signing up for an account since they care about user growth. Even if someone reports a financial crime to law enforcement, it’s so common, so white collar, and so hard to track down that even when people lose $10-100ks the best you get the paperwork and effort needed to get a police reference number and a 🤷🏽♂️ from police. (There’s this phrase from the British show @Line_of_duty that to me sums up the ridiculousness and futility of most financial fraud reporting to the police: “I’ll have to generate a non-crime crime reference number” 🥲😭)
Banks/fintechs typically get fined if they didn’t follow the process of following bare minimum due diligence criteria when opening accounts.
I wish I had screenshots for this form, it was circa 2015-2016 when I was opening an account with HSBC. (It doesn’t look like the form is that long or asks those questions any more.)
Rant over. I’m glad @mikulaja found some semblance of resolution, although it might unfortunately continue to haunt him in the future too. 😔 (I hope it doesn’t)
Thanks to @AnaisCis for connecting us. ❤️ @NateSoffio, you might have some thoughts too on disproportionate impact 🤔
Actually, one more thing: @mikulaja rightfully calls out the lack of data sharing on fraud and/or a reluctance to pay for commercial tools that track this as a reason why fraudsters can get away targetting this kind of fraud at companies they know have lax policies.
Data sharing of fraudsters, and even more intrusive forms like sharing biometrics of known fraudsters (👋🏽@hare_brain) is a big priority for large banks.
But it’s also very inequitable because this kind of denylist is even more opaque than credit rating agencies with no redress