The Data Wars Show No Sign of Slowing Down

Since the rise of fintechs over the past 10 years or so, there has been a long-standing battle between banks (or other financial institutions) and third parties over the sharing of customer data. 

Fintech firms have argued they need access to customers’ account information so the customers can use their service. Banks have typically replied that sharing such information with third parties represents a security concern. Fintechs, meanwhile, usually have responded by saying the security argument is bogus, and that they are simply trying to quell competition.

This scenario is currently playing out again exactly as you’d expect as PNC Bank customers who are also Venmo users have been having difficulty using the popular P2P app’s services. PNC said this was due to “security enhancements” it recently made, and in one tweet advised a frustrated customer to “explore alternative means of money movement, such as Zelle.” Zelle, of course, is a competing P2P payments app owned and operated by big banks, including PNC. 

Regulations in other parts of the world, such as Europe’s PSD2, aim to give consumers more freedom over which third parties they choose to share their personal data with. Unless a similar compromise is reached in the U.S., expect many more battles along these lines to continue.