JPMorgan Chase, a major investment bank, received a massive 1.89 billion data requests from financial technology (fintech) companies in June alone. This huge volume is causing serious problems for the bank’s systems.
Overwhelmed Systems
An internal memo revealed that only 13% of these requests were directly from customers for transactions. The rest came from fintech middlemen, often accessing customer data multiple times daily, even when customers weren’t using their apps. A JPMorgan employee described the situation as “massively taxing” on their systems. The requests often help fintechs improve their products or fight fraud.
JPMorgan’s Fee Proposal and the Backlash
Earlier this month, JPMorgan announced that fintechs like PayPal, Venmo, and Coinbase would have to pay to access customer bank account information. This decision caused a stir, especially in the crypto world.
Accusations of Sabotage
Gemini co-founder Tyler Winklevoss accused JPMorgan CEO Jamie Dimon of trying to sabotage fintech and crypto companies, claiming it’s an attempt to undermine efforts to promote digital assets. Winklevoss even suggested this move could bankrupt fintechs that help users connect their bank accounts to crypto exchanges.
Dimon’s Defense
Dimon defended the fee proposal, stating that the bank supports customer data sharing but believes it needs to be done responsibly. He emphasized the need for transparency about what data is shared, time limits on access, and preventing resale to third parties. He also pointed out the significant costs associated with maintaining the necessary APIs and system security. He stressed that the fees are to cover these costs and ensure responsible data handling.