(Bloomberg) -- Wells Fargo & Co. plans to share customer information with Plaid Inc., a data company that connects banks to thousands of financial-technology applications.

Certain Plaid customers will begin receiving the data through Wells Fargo’s application programming interface, or API, within a year, according to a statement from the San Francisco-based bank Thursday. When consumers sign up with fintech companies such as Betterment LLC, PayPal Holdings Inc.’s Venmo and Coinbase Inc., those firms use Plaid’s connections to financial institutions to display bank balances and authenticate accounts.

Companies like Plaid have sparked a bigger discussion in the banking industry about consumers’ ability to share their data with outside apps. Banks want other companies to use their API instead of using a practice known as screen scraping, which often requires consumers to share their bank username and password so the outside app can log in and gather information. The APIs give lenders more control over what data is distributed and how it’s released. But startups and other firms say those restrictions sometimes prohibit them from providing certain services.

“Steps like this announcement are important signals to the market that we are making good progress,” Ben Soccorsy, head of digital payments for Wells Fargo Virtual Channels, said in a phone interview. “This is an important milestone in the context of working with data aggregators like Plaid to reduce screen scraping and drive more convenience and security for our mutual customers.”

Wells Fargo will also offer consumers the ability to turn off their data sharing through a section inside its mobile app known as Control Tower. Soccorsy said the tie-up with Plaid complies with the recommendations from the Financial Data Exchange, an industry nonprofit that has been working to create uniform standards for banks inking these kinds of data-sharing agreements.

“Wells leaning into the idea of data control and transparency across an ecosystem is setting them apart,” Sima Gandhi, head of business development and strategy at Plaid, said in an interview. “Data access will be a continued and evolving story.”

--With assistance from Hannah Levitt.

To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Dan Reichl

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