Plaid, a San Francisco startup that aims to make an API available for banks to share financial data with developers has launched with $2.8 million from Spark Capital, Google Ventures, NEA, Felicis Ventures and Homebrew Capital.
The company is already supporting access to data from American Express, Wells Fargo, Bank of America and Chase. I asked Zach Perret (pictured above, right), co-founder, about security, which seems like the biggest challenge in building this type of API. He wrote in an email:
“We’re very conscious about data regulations and security – and have built everything in a security-forward manner. We keep all the data anonymized internally, and the entire system was built to be PCI compliant with encrypted traffic both ways.”
The net result of this is that developers can now build cool apps that let you link a web service to your financial data. So this could be as simple as writing an app that tells you when your bank account or credit card spending hits a certain level or building a piggy bank that glows brighter when you’re flush and dims as your account balance dips. On the other hand, one could build more modern-day versions of complex financial apps like Quicken or Quickbooks.
Perret said that, so far, most of the firm’s clients are on the business side, using the API for cloud accounting, automated taxes and expense management applications. But, in the past couple months, the company has begun integrations with larger consumer applications that will be enabling account linkage soon.
If data is the gold flowing through our connected devices and web services, then APIs are the channels that gold flows through. Which is why Intel bought Mashery in April or CA buying Layer 7 just a few days later. Plaid joins other efforts to offer an industry specific API. Others include the Human API effort that wants to provide access to biometric data or the WC3 effort to create a unified API to access automotive data.
Perret said the rationale behind Plaid was simple:
“The barriers to entry in financial technology have been high for years due to bad infrastructure, harsh pricing, and low quality data. The idea of building a fintech application in a hackathon has always been really exciting to us – and that’s what we want to enable.”
It’s unclear if such industry-specific verticals will gain ground over vendor-specific efforts, or how those with valuable data will charge for access to it, but this is a burgeoning section of the connected economy. In case you want more on the importance and rise of APIS, I’ll offer you this presentation from 3Scale back in June: