After a security upgrade blocked Plaid from accessing customer data, the startup launched a critical social media campaign against the consumer finance giant - effectively blaming Capital One for not letting consumers access and utilize their own data. However as other aggregators have met Capital One's security requirements, Plaid now faces scrutiny on their willingness to meet these higher standards. The incident may point to a bigger issue: the need for one standard for handling data across the whole U.S. financial services industry.
“The system we have currently with bilateral agreements is not sustainable, with uneven consequences for which third parties or financial institutions they use,” said Steven Boms, president of Allon Advocacy and a member of the Consumer Financial Data Rights group. While there are also efforts to pass a national standard via legislation, it's an uphill battle. Holding out for the equivalent of Europe's General Data Protection Regulation, which required open banking, isn't practical, observers said. “We have a really unique framework: seven federal regulators and 50 state regulators,” Boms said. “It’s not realistic that there’s going to be some clear prescriptive regulatory actions that mandate a move towards open banking.”