U.S. Bank will partner with data integrator Plaid to provide customers with easier access to third-party apps, a move that extends the bank’s strategic use of application programming interfaces (APIs). The deal is an indicator of the times as banks begin to signal more fintech partnerships in the coming year.

U.S. Bank customers will be able to remain synced across the approximately 4,500 applications that are part of Plaid’s network, which enables customers to access third-party apps through APIs. This allows the apps to securely retrieve customers’ data without having to log in on the customer’s behalf.

Bank interest in Plaid’s platform has grown during his four years at the company, with Covid accelerating the trend, Dan Kahn, open finance lead at Plaid, told Bank Automation News.

“The interest in banks working with Plaid has grown exponentially in the last year,” Kahn said. “They had to shift more resources to digital, and as they shifted their own resources to digital, they also started to realize how many of these kinds of — either competing or complementary — services were out there.” Forward-thinking banks realize they won’t always have the single best product for their customers, he added.

More banks are turning to fintechs to extend their reach, according to a December 2020 study of 260 senior executives at mid-size financial institutions by Cornerstone Advisors, which found that 45% of U.S. banks and credit unions have partnered with fintechs in the past three years. The study also found that 42% of banks and 35% of credit unions are “very” interested in “partnering” with fintechs for digital account opening, although the Scottsdale, Ariz.-based consultancy warned, “we don’t believe that what financial institutions are doing here really qualifies as partnerships. They’re vendor relationships—not partnerships.” That said, 36% of both banks and credit unions see fintechs as a significant threat, up 7% from last year, according to the report.

Connecting to fintechs via APIs is not a new strategy for U.S. Bank. In 2019, the Minneapolis, Minn.-based bank announced agreements with seven other data aggregators and fintechs as it built out its own U.S. Bank Developer Portal, which gives developers access to APIs for connecting to its accounts.

Integrating via APIs allows the $553.4 billion bank to deliver a better digital experience for customers, Suzanne Galvin, senior vice president and head of open banking and API channel, told BAN, adding that the integration provides increased security for customers and the bank by “removing credentials from the overall financial ecosystem.” Galvin added that the move also gives customers more choice and control. For example, customers can revoke access to apps from Plaid.

The strategy also helps U.S. Bank, by unlocking “a host of applications across business lines at the bank and with third parties through our U.S. Bank Developer Portal, which ultimately allows customers to use and sign up for our products and services in more and new ways,” Galvin said.

The Plaid partnership also will give the bank’s customers access to the Plaid Portal, a pilot project that automatically detects financial apps and syncs them with a customer’s bank account. For instance, when a BAN writer signed up for the portal, it automatically detected her use of Mint and YNAB, two popular personal finance management apps.

The portal syncs with the U.S. Bank portal, so bank customers can manage their connections on the bank’s website and within the Plaid Portal, so any changes they make are reflected in both places. The Plaid Portal can be used to manage accounts across multiple institutions.

In fact, Plaid, which was founded in 2013, connects to 10,000 unique financial institutions across the U.S., Kahn said, including 5,000 banks and 4,000 credit unions, with a customer list that includes Wells Fargo, BlueVine and Varo. The San Francisco-based company made news when the U.S. Justice Department sued to stop its $5.3 billion acquisition by Visa on antitrust grounds, and the deal was called off in January.