A Safer Way to Share Your Data
Financial institutions are turning to application programming interfaces to securely share info with budgeting apps and tax software programs.
When you use a budgeting app, tax software or other service that relies on information about your bank and investment accounts, you can typically allow the service to retrieve automatic online updates. But some customers are hesitant to give such programs the user names and passwords to their sensitive financial accounts—and banks aren’t keen on the practice, either.
To alleviate those concerns, financial institutions and third-party services are increasingly reaching agreements to share data with application programming interfaces, or APIs. APIs act as dedicated express lanes that allow information to flow more securely between financial entities, says Don Cardinal of industry group Financial Data Exchange. For example, suppose you want to link your Chase bank account to budgeting app Mint. Because Chase has an API relationship with Intuit, Mint’s parent company, Mint will redirect you to Chase to enter your bank login credentials rather than have you supply them to Mint. You can also choose which Chase accounts Mint is able to access, which is useful if you want to share information about your credit card but not your savings account.
Other major banks, including Bank of America, U.S. Bank and Wells Fargo, are also developing API agreements. All of them offer or plan to offer online dashboards that will allow customers to see what services are connected to their accounts via an API. When you log in to your financial account online, look for the dashboard within your profile or security settings.