David Carroll, an executive vice president at First Union Corp. and its electronic commerce officer, was unexpectedly thrust into the spotlight last year when his company became a leader in setting standards for account aggregation.

But in a recent interview, Mr. Carroll emphasized that, while aggregation is a useful service, it can only do so much.

For all the hubbub aggregation aroused and all its convenience, it "offers no more of a competitive advantage than night deposit boxes," he said.

Even so, First Union, of Charlotte, N.C., plans to introduce an account aggregation service driven by Yodlee Inc. of Redwood Shores, Calif., to its retail customers in the second half of 2001. It may also offer around the same time a service for its private clients; it would use a different company's technology and direct feeds of information to consolidate account information.

It was First Union's opposition to screen scraping, a staple of Yodlee and other aggregators, that brought the banking company to the forefront of the controversy. Unlike companies that rely on direct feeds, screen scrapers lift account data from Web sites, usually without the site owners' permission or knowledge.

First Union gained the spotlight when it sued PayTrust Inc. of Lawrenceville, N.J., in December 1999, saying PayTrust had violated standards that First Union had recently published about gathering account information from its Web site. First Union dropped the lawsuit in March when PayTrust agreed to adhere to the bank's standards.

At First Union, these security and privacy standards were considered more important than being among the first to offer aggregation, Mr. Carroll said. "If we thought there was a first-mover advantage, obviously we would have moved a lot faster, but we wanted safety and security more broadly addressed."

Aggregation is "a case where technology sprinted ahead of regulation," Mr. Carroll said.

First Union expects that aggregation will give clients more reason to visit its site and do business with it, but that it will bring few benefits beyond that, Mr. Carroll said.

"It is a retention strategy as well as a cross-selling strategy," he said.

He added that from the bank's perspective, "it's pretty easy to do" and "doesn't take a lot of effort or programming."

But from the customer perspective, the service will not a big influencer, Mr. Carroll said. "I don't think aggregation will be in the top three decision points that a client uses in choosing a financial institution."

As more companies adopt the service, the success of an individual bank's aggregation service will rely on its execution and delivery, Mr. Carroll said. "All banks have the same upside and the same downside and the same risks and the same opportunity to serve their clients."

Crucial factors include the level of integration between aggregation and other services, its reliability, and other service measures, Mr. Carroll said.

As with other service and customer relationship management products, he continued, aggregation's payback is not quantifiable.

"Aggregation is one component of a CRM strategy and you can't isolate it and say, 'Does aggregation make money?' " Mr. Carroll said. "It is a powerful retention tool and it helps us get a better handle on the basics."

First Union has won industry recognition for its pioneering work in promoting aggregation standards. Its guidelines have served as the foundation for the Banking Industry Technology Secretariat's committee to promote privacy and security in this area.

Anil Arora, president and chief executive officer of Yodlee, said: "I give First Union a lot of credit for having perspective. They called us when they felt our service and product reached a certain level."

Lawrence G. Baxter, executive vice president of Wachovia Corp.'s eBusiness division, said he thought First Union was right to raise the flag about the difficulties associated with aggregation. "It was a very responsible thing that was treated by the technology industry as a typical bank knee-jerk reaction. But they were absolutely right."


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