Does Plaid still operate via screen scraping? I'm a little perplexed as to why banks don't have easy to use APIs, especially given recent regulation. It seems against their best interests to allow a third party to screen scrape and provide a service which the banks themselves could easily reproduce.
What am I missing? Is a bank with an easy to use API not a sound business decision from the bank's perspective?
I know Monzo (challenger bank in UK) has/had an API, though I haven't heard of anyone using it.
All a bank is, is a UX on top of low-level financial APIs like ACH. If the bank then exposed an API, you could just use it to build another bank (without all the effort the original bank went through) and so compete with them on lower margins (because you don't have nearly the capital costs to recover that they do.)
Basically, it's the same reason that phone companies would never have allowed MVNOs to exist without legal regulation forcing them. The MVNOs outcompete the infrastructure-building phone companies, because MVNOs don't have to build infrastructure!
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Slightly off topic:
Does Plaid still operate via screen scraping? I'm a little perplexed as to why banks don't have easy to use APIs, especially given recent regulation. It seems against their best interests to allow a third party to screen scrape and provide a service which the banks themselves could easily reproduce.
What am I missing? Is a bank with an easy to use API not a sound business decision from the bank's perspective?
I know Monzo (challenger bank in UK) has/had an API, though I haven't heard of anyone using it.
All a bank is, is a UX on top of low-level financial APIs like ACH. If the bank then exposed an API, you could just use it to build another bank (without all the effort the original bank went through) and so compete with them on lower margins (because you don't have nearly the capital costs to recover that they do.)
Basically, it's the same reason that phone companies would never have allowed MVNOs to exist without legal regulation forcing them. The MVNOs outcompete the infrastructure-building phone companies, because MVNOs don't have to build infrastructure!