Naturally, the deal will first affect those who bank at Chase and use Intuit's personal finance applications, which include Mint, TurboTax and QuickBooks. Currently, these applications have a combined audience numbering in the tens of millions. But even if you’re not a customer with Chase and Intuit, here are some major (and largely positive) ways the deal may eventually affect online banking for all customers.
A Different — and Possibly Faster — User Experience
The deal promises to make the use of apps and an online bank account faster in several ways. At present, apps like Mint stay current with your bank account by periodically logging in with the bank, a method that creates added strain on the bank's servers and creates lag between the app and your account. Intuit's new partnership with Chase allows the company's finance apps to obtain customer bank account data from Chase automatically and continuously, through the use of application programming interfaces (APIs). This direct connection should reduce the time and processing power Intuit's apps require to fetch data. Mint, for example, will be faster at downloading the latest transactions from your Chase account and factoring them into its budgets and charts.
This changeover also promises a faster user experience. Until now, financial apps required users to provide their bank ID and password so that the program could log in as the user and copy account data from the bank's site. Following the deal, Intuit's apps will instead redirect users to a Chase login screen, which will then permit the apps to download information directly through the Chase API.
In the press release announcing the deal, the two companies suggest that users may only have to deal with these prompts one time, after which Intuit receives a token from Chase authorizing it to download future data as needed. While that promises a less cumbersome process, it remains to be seen whether Chase and Intuit won't make logins necessary for each new session.
Better Protection of Your Financial Data
Given how information breaches in the past have compromised individual users across multiple accounts, you’re forgiven if you fear that increased centralization of data will be akin to putting all your eggs into one basket, and that a single breach at Chase may compromise your entire financial record.
In fact, Chase and Intuit promise the opposite, and they may be right. Again, we’ll have to see how this plays out in practice, but a direct business-to-business connection via APIs theoretically allows information to remain more secure than in the old system. Rather than giving up IDs and passwords to a slew of apps, users with Chase accounts will only log in with Chase, keeping their credentials secret from third parties.
In short, the fewer places information is stored, the easier it is to protect. And given Chase's vast resources and keen interest in digital security, it's far better situated to provide that protection than the typical fintech company.
A Boom In Other Such Partnerships
Given the technical and security advantages at stake, other major banks will certainly monitor the progress of Chase's new initiative to determine whether they need to do the same. Although APIs have been in wide use on the Internet for over a decade, they haven't played a role in the more recent explosion of third-party apps like Venmo and Mint, which let consumers transfer and budget money through features that banks themselves have been slow to provide. Assuming all goes well, the Chase-Intuit agreement brings these apps one step closer to occupying a permanent position in the financial services industry.
Until now, such deals may have been delayed because traditional banks were reluctant to relinquish their control over customer information. Because they’re uniquely placed to gather consumer account data, banks have been leery of sharing that treasure trove too freely. However, with online services and apps swiftly reshaping the way people use money, banks risk falling behind if they don’t adapt and integrate into the new way things work.
While it remains to be seen how quickly Chase’s competitors follow suit, it seems safe to expect that this deal will be followed by others, and bank customers should get used to the idea of handling their money through third-party software.