laramiedunlap / group-fintech-case-study

Plaid

Plaid FinTech Case Study

Background

Plaid was founded in 2013 by Zach Perret and William Hockey. The pair originally attempted to build consumer financial management products, including budgeting and bookkeeping software. When confronted with difficulties in connecting bank accounts required for these tools, they decided to pivot their core business focus to a unified banking API.

What Plaid does?

• It allows communication between banks and financial apps more efficient
• If you want to make transfers or payments (Sezzle) it will come in between those transactions keeping your personal banking information and information safe and secure.

Competitors

• Stripe
• Codat
• Xignite
• Dwolla

What Tech is used

• It's an API that stores your login credentials from your bank and keeps it safe. Anytime you are asked for the information (earnin) Plaid sort of steps in and saves the day. That way your personal details are safe and secure.
• It’s considered a FinTech company because of the simple fact that it uses technology to make the communication efficient between two separate entities (bank and a financial service application)

Why is this company exemplary in the FinTech space? What are their strengths and weaknesses?

• It’s user friendly and developer friendly
• It connects to thousands of financial institutions
• Goal/claim is that they would be able access and authenticate accounts in every bank or credit union in the country

Disadvantages

Connectivity issues across a few banks.

Apparently because of the difference in philosophical beliefs between PNC and Plaid there are connectivity issues. Neither company agrees on how data is fetched and credentials are stored.

It does not support the cryptocurrency world.

What is the prognosis for this company? Where do they expect to be in the future?

We can see Plaid playing a big part of the cryptocurrency world. I think that to be able to pay with your cryptocurrency will be made more efficient if plaid stepped into the arena. I’m saying that with very little knowledge of the crypto world.

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• Transactions Auth Balance Identity _confirmation Investments - balances and transactions for brokerages Assets - financial snapshot for loans Liabilities- access customer loan data