How are Plaid and Decisionlogic Systems Different?

​​

What is Plaid?
When you connect your bank account to apps managed by financial institutions such as American Express, Venmo, or Upstart, you will most likely contact Plaid. Your financial information is verified and authenticated by Plaid, which enables businesses to send sensitive information safely.
 
The software offered by Plaid acts as a go-between for your bank or credit card accounts and the mobile applications offered by other financial institutions. One example would be a website for managing portfolios, such as Personal Capital, or an app for managing finances, such as Mint. For websites like this to function correctly, they must access your account information. It's understandable if you're apprehensive about giving private information about your finances to a different organization.
 
Here is when the plaid pattern comes into play.
Plaid is an intermediary that you use so that you don't have to give all of your bank login information to Mint or Personal Capital. At the moment, Plaid can link with a wide range of critical financial institutions and credit card firms, including Bank of America, Wells Fargo, American Express, and U.S. Bank.
 
How does the Plaid system function? 
You might, for instance, use Plaid to connect to the bank or credit card account you have with Chime. You will be asked with a window from Plaid whenever you need to pass the credentials for your bank account to another financial app.
 
You will then be able to submit the form after entering your Chime login and password. This information is not shared with any third parties and is only kept by Plaid, who will then call Chime to verify your login credentials. If you have implemented two-factor authentication (2FA), you will also be required to enter that information. If your bank does not allow this additional degree of security, Plaid also provides the option to utilize its two-factor authentication (2FA).

According to the company's website, Plaid possesses certifications in internationally recognized security standards such as SSAE18 SOC2 compliance and ISO 27001 and ISO 27701 certifications.
 
After you have authenticated your bank information using Plaid, the link will be established. It will then be possible to utilize it to transfer the financial information you have authorized. This information can include a record of previous transactions, a balance, or anything else. One of the finance companies, Sezzle, which offers an installment payment platform, recently announced that it would be adopting Plaid for financial authorization. Due to the partnership, customers of Sezzle will be able to link their Plaid accounts to their respective financial accounts. Because of this, they will be able to make payments through the Automated Clearing House (ACH), a more time- and cost-effective method than using a credit or debit card.

What Is Plaid?
The software, known as Plaid, acts as a conduit between the websites you use for your financial transactions and the information you want those websites to get. Utilizing a service such as Plaid can prevent financial websites from gaining access to all of your banking and other sensitive information. Instead, you will only disclose the particular pieces of information that you have indicated.

How exactly does Plaid do its job?
Numerous financial institutions operate under the justification that they need access to sure of their customers' financial details. This may include a portfolio aggregator that requires access to your investments or a budgeting website that requires access to your bank and credit card activity. Using Plaid, these websites can obtain this information without receiving your bank or credit card login details directly from you.
 
Is There Safety in Plaid?
Plaid uses some of the most advanced encryption technologies when transmitting your financial data. The Advanced Encryption Standard (AES 256) and Transport Layer Security are included in this (TLS). Plaid also employs a method known as multifactor authentication (MFA), which provides an additional layer of protection for the transmission of your financial data.
 
Why is it that my Chase account is no longer linked to Plaid?
​Plaid was able to link to Chase accounts in the past. However, the bank is no longer listed as a supported institution on its website. The termination of Plaid's relationship with Chase has not been addressed in any public statement.

Why is it that my Chase account is no longer linked to Plaid?
Plaid was able to link to Chase accounts in the past. However, the bank is no longer listed as a supported institution on its website. The termination of Plaid's relationship with Chase has not been addressed in any public statement.
 
What is Decision Logic?
The Decision Logic software was created as an enhanced bank verification system that would allow lenders to rapidly check financial information in the fight against fake bank statements, which have become a significant concern and are more common in the commercial lending market.
 
It was created during the financial crisis of 2008, which was partly brought on by a relaxation of the requirements for approving house mortgages. At the time, many applicants submitted fabricated documents to obtain approvals for mortgages they were ineligible for.
 
Many people acquired mortgages that were above their means because there was insufficient technology to verify whether the banking information provided during the qualification procedure was accurate or not.
 
Families were stuck paying a mortgage they couldn't afford, and the ensuing housing bubble led to many of them losing their houses. The corporate world was affected by the expansion of the financial technology markets. For bank verifications, decision logic has emerged as the industry standard.
 
How exactly does one make use of the Decision Logic service? 
If you are in the process of applying for a business loan or line of credit, you may be wondering precisely what the service will do to access and retrieve your information. This is a natural question to ask in this situation.
 
If you are a lender, you may be curious about how you may use Decision Logic to simplify the information retrieval process.
 
An explanation of each stage is as follows:
 
Step 1:
Send a link Before finalizing an application for a business loan or advance, the lender will send the applicant or business owner an email or text message containing a particular Decision Logic link. The applicant or business owner will then view this link.
 
Step 2:
The Client Agrees to Participate. After that, the Applicant Enters Their Financial Information. Remember that you can only click on this link once; after that, you won't be able to use it again even if you try. This link can only be used once.
 
Step 3:
Opt-in successful. After inputting the information, the opt-in is considered successful, and the verification procedure is finished.
 
After that, the customer will get a signal that their application was successful, and they will be automatically transferred to the lender's website.
 
Bear in mind that as an additional layer of safety precaution, that link will become invalid and cease to function if the applicant does not enter their information within a predetermined amount of time.
 
In addition, neither Decision Logic nor the lender will have access to the information or the strictly up-to-date business statements; only the underwriters would have this privilege.
 
Step 4:
​View bank statement
​Now that the lender can access the applicant's bank statements, they can examine those documents to verify their identity. This enables the lender to connect via API and helps speed up the process of funding the business.
 
The lender will receive a statement that is a read-only version of the applicant's business bank statements. This statement will only be used for the one purpose of assisting in the approval process.
 
And that brings us to the end of our discussion! The beginning of the process and its conclusion can be accomplished in minutes.