When you are looking to manually link your bank accounts to financial services, it can be really troublesome. However, Plaid is a fintech company that makes it a bit hassle-free. But the question that is quite intriguing is- Is Plaid safe? Well, in this article, we will be decoding everything about the Fintech company Plaid and also will be answering the question- Is Plaid safe? So, keep reading to know more!
What is Plaid?
Before we give you a detailed account of the question- is Plaid safe, let me first tell you about the platform Plaid. Plaid is basically a financial technology company that acts as an intermediary between your bank as well as the other financial applications. The most important thing that they do is that they offer an important verification service. Since, Plaid acts as an intermediary, the financial apps are given limited access to the bank account details as well, and they are granted only the relevant information that is required for carrying out functions that are authorized.
Now that you have got a good understanding about Plaid. Let’s explore in the next section of the article about Plaid banking.
What is Plaid Banking?
When you are doing Plaid banking, you must be doing the Plaid bank verification. Plaid bank verification is primarily the process by which they will authorize the payments or the data from your bank. This data will be transferred to a third party without that third party having direct access to your banking information. This makes it super convenient for all the users. You will not be required to share data with any financial app instead, share it with Plaid. When we discuss the information here, we simply mean the bank login information, and this means providing the permissions for them to download data, which includes:
- Account balances (credit, checking, loan, savings, etc.)
- Personal information (name, address, email, phone)
- Account names and numbers
Seeing this list of information, if you are worried, is Plaid safe? Then let me tell you that the company will be protecting as well as managing your information by giving out the information only which is necessary for the apps who will be requesting it
Want to get more clarity on the question as to is Plaid safe? If yes, then head to the next section of the article to decode more about this question.
Is Plaid Safe?
It is very common to think about this question, especially when your banking details and finances are concerned. The answer to this question can’t be given with a simple Yes or No. However, considering the fact that Plaid has not been hacked or any kind of security breach has not taken place till now. It is pretty safe to say that Plaid is safe for now. Hence, if you are considering the question as to- is Plaid safe to use? Then, definitely Plaid is a very safe platform that you can trust with all your financial information. Plaid is primarily built with the goal of maintaining user security. The platform’s top priority is to allow the financial apps that are commonly used for accessing the accounts on a secure as well as on a need-to-know basis.
As we have already divulged in the previous section of the artcie that your financial information will be shared by Plaid to some third party applications. However, these information are safe and they will not be misused by Plaid. The security protocols and privacy concerns are top-notch at Plaid and hence the information which you share with Plaid will be safe and secure.
Privacy and Security Protocols:
Is Plaid safe? Is the question is still lingering on your mind, then let me clarify to you the privacy and security protocols that Plaid follows in this section of the article. When a user is making a transaction with a Privacy virtual card, they are debiting the attached funding source. However, first, one needs to establish a connection to one bank account, and this is exactly where Plaid comes into play
To create the connection in your bank account, you will first be required to log in through your bank’s online portal. This will be done through the Plaid integration once this information gets verified. With those login credentials and the ability to view the bank account, Plaid will be securely transmitting the information for Privacy. These can include the account and routing number so that the platform can process the transactions. Because of privacy reasons, Plaid will not be storing your bank login information anywhere on their systems. Also, you will be able to change your bank login credentials anytime you want without having to use the Privacy Virtual Cards.
With this, You can understand that Plaid works ethically and wants to significantly protect its users’ banking information without compromising their safety and security. So, is Plaid Safe? Yes, you can use Plaid as it operates, keeping in mind the utmost security of its users.
Can You Link Plaid to Your Bank Account?
In the previous section of the article, we briefly discussed whether- is Plaid safe. In this section we will be giving you a glimpse as to why you must consider linking Plaid to your bank account. When we discuss the way Plaid operates, we see that it primarily follows security and safety protocols to ensure that users’ sensitive data stays away from any potential hacks and is out of the hands of fraudsters. On top of that, the consumers will be allowed to view as well as control exactly what data they have chosen to share with Plaid
Plaid collects some of the important banking information such as bank balance information, account and routing numbers, transactions, and contact information. One thing to keep in mind is that Plaid will be sharing this information with the institutions that you have authorized to share. But Plaid will not be keeping any information stored in its database and will be accessing the information only which is required to the third party. So, any chance of a security breach is highly unlikely
Plaid’s Security Protocols:
Here are some of the security protocols which are followed by Plaid:
Independent Security Testing:
Plaid primarily employs outside parties for regularly auditing security protocols as well as conducting stress tests to tighten information security gaps
Strong Authentication:
There is a strong authentication practice employed by Plaid. Not only that you will find that there is Multi-Factor Authentication which is used by Plaid for securing the sensitive data that it stores. You will find that there is an additional layer of certification that goes beyond usernames as well as passwords for accessing the internal systems
Robust Monitoring:
You will find that the key component in Plaid’s information security program is that it works around the clock monitoring system. You will get automated alerts 24/7 along with on-call team help by Plaid to resolve any queries and solve them
Data Encryption:
Data encryption is the most important feature as well as security protocol, which is followed by Plaid. When you are linking a bank account, Plaid will instantly encrypt the sensitive data as well as it will be transmitting the data to the external application. If you know about encryption, then you will know that encryption is a very common practice that is seen in information security that will protect the data from any unauthorized parties by simply encoding it. With Plaid, you will see that the platform uses a combination of Advanced Encryption Standard (AES) for protecting stored data as well as Transport Layer Security (TLS) for data-in-transit.
Plaid Open Banking:
You will find that Plaid relies on the open banking principles for providing services to its consumers as well as its developers. In open banking, third parties will be allowed to control the access of the financial data by the way of application programming interfaces which are simply known as APIs.
The open banking system are primarily designed for making it easy as well as safe for the consumers in order to manage their finances online. As mentioned earlier, you will find that in Plaid banking, the API will be using an encrypted token to communicate your data with various financial apps. You can also unlink the access to your bank account in order to not let the token get access to your information.
Conclusion:
Is Plaid safe? Yes, plaid is safe to use nad the security protocols along woth the privacy concerns which are followed in Plaid will be helping the users to feel secure about their sensitive information to not get compromises. Plaid makes banking hassle free and safe. That’s all folks. I hope the article will help you to get all the information you need.
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