They also serve as an auditing service, of sorts. Instead of you having to gather a bunch of bank statements to verify income, Plaid pulls those numbers for the service provider. The service provider can trust Plaid as an intermediary whose reputation would be damaged if they helped people lie or were otherwise delivering unreliable information. In my experience Plaid is a huge UX improvement and if you use them in OAuth mode you literally have no reason to criticize because the entire argument falls apart (they don’t store your credentials and can only do what you authorize granularly, using the system as designed).

Anyway my bone to pick is with the “3rd party instantly bad” mentality. Your bank probably uses 1000 and 1 3rd parties too. Our banking regulations are focused on making sure money depositors aren’t taken advantage of and harmed by unhealthy or risky asset management practices. If you don’t find Plaid valuable then thats fine, you do you. I do wonder how you can know that without using them though…