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.

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Lisa Gerstner
Contributing Editor, Kiplinger's Personal Finance

Lisa has spent 15 years with Kiplinger’s Personal Finance and heads up the magazine’s annual rankings of the best banks, best rewards credit cards, and financial-services firms with the best customer service. She reports on a variety of other topics, too, from retirement to health care to money concerns for millennials. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.