Banking apps feel the pinch. Tools that track
your budget rely on a steady stream of data from banks, brokerages and credit card companies— but that’s not a given.
Tools that let you track all of your financial accounts in one place, such as Mint. com, rely on a steady flowof data from banks, brokerages and credit card issuers to operate smoothly.
Lately, that steady access hasn’t been a given. Mint experienced disruptions in its feed from Chase last fall because of heavy traffic on the bank’swebsite. Plus, Chase later notified some customers that theywould have to log in to their Chase accounts and go through steps to ensure that desktop applications such as Quicken would continue to sync data.
About the same time, Mint users withWells Fargo accounts dealt with service interruptions— possibly an inadvertent side effect of security updates.
Chase andWells Fargo assert that software updates and clogged servers caused the blockages. Even so, banks may have other reasons to think twice about keeping an open line with aggregators.
First, they’re competitors: Financial institutions offer their own money-management tools. Chase Blueprint lets customers with certain credit cards set and monitor spending goals, andWells Fargo’sMyMoney Map provides similar options. In late 2014, Mint launched a separate application, Mint Bills, which allows users to pay bills online from one portal— just as many customers can do with their bank’s online bill-pay feature.
Banks are also on edge about the security risks involved when customers provide account information to third parties. Some have posted disclaimers on their sites that customers could be on the hook for financial losses that result from sharing log-in information with other services.
That might not hold up under federal law, says Lauren Saunders of theNational Consumer LawCenter. “You still have the right to contest unauthorized charges on your bank account.”
Whether a budgeting toolwould be liable in the event of a data breach is an open question, and one thatwon’t be resolved until lawmakers create clear rules or an app is hacked and the courts decide. In 2015 through December 8, therewere 66 data breaches in the banking, credit and financial sector, according to the Identity Theft Resource Center.
Mint and similar sites haven’t suffered any known breaches (but in today’s hostile environment, no entity is infallible).
Mint says that its encryption standards match those of a bank. If a crookwere to log in to Mint’s budgeting tool with your credentials, he couldn’t see account numbers or make transactions, but he could move money with Mint’s bill-payment app.
Because consumers usually have financial accounts with a variety of institutions, banks aren’t likely to provide the big-picture value that applications such as Mint offer. And customers who are unhappywith howan institution is handling its relationships with third-party services can vote with their feet.
“If there’s a backlash, banks will adjust,” says S&P Capital IQ analyst ScottKessler.
Don’t expect the complex symbiotic relationship between banks and budget apps to end.
“Banks rely heavily on these platforms to get new customers,” says AlexMatjanec, ofMyBankTracker, a consumer site for bank information. For example, banks pay Mint to promote their credit cards to its users.