Plaid CEO Says Its Next Five Years Will Look a Lot Different Than the Last Five

The form factors of finance are undergoing radical transformation, shifting from physical transactions and paper trails to embedded digital experiences and autonomous agents. The shift means that underlying digital connections that underpin money movement and data access are becoming central to innovation across the banking, FinTech and digital economy landscape.

Plaid launched 12 years ago primarily as a data connectivity layer, allowing consumers to link bank accounts to FinTech applications, but is now evolving into a sophisticated platform focused on enhancing financial analytics and enabling new digital experiences.

PYMNTS CEO Karen Webster mused on the transformation, asking Plaid CEO Zach Perret in a recent interview: “How did someone with an undergraduate degree in biology end up building a data analytics platform that now counts one in every two U.S. consumers as users?”

Perret’s interest in leveraging computers to do new things in finance found an opportune moment in the early part of last decade, when frustrations with the banking system were running high in the wake of the Great Recession.  

“For a long time, developers were our primary audience, and frankly, our only audience,” Perret said, as initial products were focused on financial services, with consumer-facing offerings such as expense management tools.

“If we did it really well,” he said of the initial mindset, “then that developer would get promoted, or at least they would get a gold star on their performance review.”

The customer base has since broadened widely to include chief risk officers, CFOs and technology executives.

While Plaid has become widely known for its connectivity rails, Perret highlighted the shift toward leveraging the vast amounts of data flowing through its platform to solve complex problems like financial fraud, to improve credit scoring and enhance payments analytics.

Read more: Plaid: Bank Account Connectivity Underpins ‘Data Revolution’ in Financial Services

Looking ahead five years, Perret stated that he wants Plaid to be known as “the analytics platform for financial services or the data platform for financial services.”

The platform concept remains central, but the specific products being built are changing rapidly. This evolution is driven by a desire to move finance beyond outdated, manual processes.

Perret offered a vivid comparison when describing Plaid’s primary competition: “The way that we think about our competition is mostly that we’re competing with paper and old processes.”

He recounted a personal memory of his parents applying for a mortgage by putting “all their paperwork … into a shoebox. … They took it into the bank branch … and they put it on the desk of the mortgage broker.”

Plaid aims to eliminate this kind of manual, slow process, replacing physical data submission and human data entry with faster, digital alternatives that expedite processes like mortgage applications from weeks to potentially much quicker timelines.

The Regulatory Climate

The regulations surrounding financial data access, often discussed under the umbrella of open banking, remains a significant point of uncertainty in the U.S., particularly regarding the future of Rule 1033. Dodd-Frank explicitly states that consumers can access their financial data and use representatives like Plaid to do so, but the specifics of implementation are in flux.

Perret acknowledged the lack of clarity surrounding 1033, noting that Consumer Financial Protection Bureau’s (CFPB) rule offered a helpful set of assumptions for the industry. The uncertainty “will make for a period of chaos,” he said, which could be challenging for newer players without Plaid’s scale. It could be potentially confusing for consumers, too, if not handled properly.

Despite this regulatory ambiguity, Perret expressed confidence that the fundamental direction for Plaid remains unchanged. The core truth, in his view, is that consumers own their financial data and need to be able to use it. These actions can include signing up for new products, applying for loans, analyzing their finances or enabling entirely new applications not yet conceived.

Financial institutions must allow data movement both in and out of their systems to enable consumers to use applications like budgeting tools or wealth management platforms that require a holistic view of their finances. For example, a wealth management adviser at a large bank would need to pull in data about assets held elsewhere to provide comprehensive advice.

While Perret said he desires clearer regulatory guidance on issues like liability and minimum data and latency expectations, he emphasized that the statutory right for consumers to access their data and strong consumer demand will continue to drive the need for platforms like Plaid.

“One of the bigger concerns I have would be the inconsistency among banks regarding data,” he told Webster, and lack of standardization of data information and flows has resulted in instances where, for example, banks blocked access to cryptocurrency applications, leading consumers to switch banks.  

When asked what he would change, Perret said he would focus on cementing consumer data ownership rights, establishing minimum viable data and latency expectations (potentially varying by bank size), and addressing liability questions in partnership with banks. There’s a need to be thoughtful about how the rule applies to small to medium-sized banks that may lack the technical or financial resources to build application programming interfaces (APIs).

He contrasted the U.S. approach — where industry collaboration largely drove open banking adoption under the statute — with the U.K.’s more prescriptive mandate that initially slowed innovation due to regulatory involvement in operational details, although he noted the U.K. is now seeing more relevance with updates like variable recurring payments.

Role of Agentic AI

Looking ahead, the emergence of agentic artificial intelligence (AI), where autonomous agents could potentially manage financial tasks like shopping, investing and paying bills on behalf of users, presents both opportunities and challenges.

“What’s the role of Plaid in a future where agents are talking to agents and banks directly?” Webster asked.

While some envision “banking will be done by agents,” Perret contended Plaid becomes “much more relevant” in such a world.

Even if agents handle tasks, the underlying consumer is still a human, and two crucial elements will be necessary: verifying identity and aggregating data from disparate financial accounts.

Perret highlighted that Plaid is already heavily involved in both, building the “verified source of identities” and the capability to aggregate data from various banks and investment accounts to inform agent actions.

He championed this “agentic world,” seeing it as a way to simplify complexity and create a powerful experience, although he acknowledged a “big trust gap” currently exists between humans and agents in finance.

Layered Approach

Plaid is building its platform with all this in mind, offering products across multiple layers. At the foundational level, Plaid provides data on behalf of the consumer, such as transaction data for budgeting apps, updating the data as new transactions occur.

Moving up the stack, Plaid adds an analytics layer, offering derivative insights like smart categorization on top of the raw data. The highest layer involves analytics that enable actions, such as moving money or investing roundups, which require more complex checks for fraud and money laundering because they involve fund movement.

Perret explained that as they build these analytics-oriented solutions, Plaid is becoming more verticalized, focusing on specific use cases and audiences.

For instance, their credit products target chief credit and risk officers involved in underwriting, while anti-fraud tools are designed for those fighting fraud. Similarly, payment tools focus on users’ bill pay experiences, helping them better execute payments and understand associated risks and potential failures.

While these specific solutions are more focused, the intention is to move across different verticals over time. While Plaid’s base data-oriented APIs are “horizontal,” enabling a wide variety of FinTech products, the analytics and insights layers are becoming narrower in terms of the audience they serve.

Identity and credit underwriting are key areas where Plaid is applying this multilayered approach and expanding its focus beyond developers to product managers, business lines and increasingly, chief risk and chief credit officers.

Consumers Own Their Identity

Perret emphasized that the consumer is and will be the owner of their own identity. Plaid facilitates identity verification and data transfer when a user signs up for a new financial product, acting as an enabler for this “financial passport” functionality, allowing users to move from one platform to another. A key focus is making it seamless for users to verify their identity in one place and then easily carry that verified trust to another platform, provided their identity and risk levels haven’t changed.

Looking ahead, Plaid continues to refine its platform and expand its reach. While large banks are generally integrated via APIs, Perret acknowledged the challenge of bringing smaller banks into the system. Plaid is working on API builder tools and partnering with platforms to help small to medium-sized banks integrate, though he noted it will take significant time to reach 100% coverage.

Regarding future company milestones, Perret addressed the prospect of an IPO, stating it’s “in the offing, it’s just a matter of when, not if.”

As he told Webster, “We think of ourselves with the concept of, ‘How can we take the data points that we have, and the abilities that we have … and create tools that solve these deep problems in financial services that couldn’t have been solved before then?’”