A new service meant to foil account aggregators by prohibiting them from taking customer information from bank Web sites is threatening to crack a delicate peace forged in recent months between scrapers of customer data and their targets.
Vyou Inc. of San Jose, Calif., has rolled out Aggregation Control Services, which lets institutions manage third-party Web access to customer information. The service can identify the agents or bots that aggregators use to gather data from Web sites and allow only certain ones to go through or it can block access altogether.
Peter Levy, chief executive officer of the two-year-old company, said it is in discussions with two large banks about using the service.
The new service taps into an anti-screen-scraping mentality that was prevalent about a year ago, when banks were first coming to grips with aggregation and realizing that other companies could swipe customer data off their Web sites.
But as more and more banks have introduced aggregation services and accepted screen-scraping as a fact of life, Vyous success may depend on how much anti-aggregation sentiment banks are still harboring.
Mr. Levy maintains that fears of aggregation linger. No industry is more concerned with aggregation than the financial community, he said.
Aggregation Control Services, which was introduced Monday, can do much more for a bank than simply prevent outsiders from snatching its data, Mr. Levy said. Banks could use it to turn aggregation into a profit center, he said: They could block access to the data to anyone who did not pay for the privilege of collecting it, for example.
Also, a bank could stop an aggregator from lifting customer information unless the aggregator agreed to place the banks logo next to the balance.
The service could spur healthy competition by letting banks pick and choose which aggregators have the right to take information from their sites and giving them better control over the way their information is presented on other sites, Mr. Levy said. He also noted that aggregators operate outside the scope of the Federal Reserve Board, and that banks working with such companies may be held liable for losses that may be incurred through aggregation.
Vyou can limit liability, turn aggregation into a profit center, encourage consumer confidence, and allow financial institutions to set the terms, Mr. Levy said.
Banks initially resisted aggregation because they had concerns about the security and privacy of customer information being scraped from their Web sites without their knowledge or permission. But growing customer demand for the service has caused dozens of institutions in recent months to sign on with aggregation companies while seeking ways to make the process work more securely.
American Express Co. joined the bandwagon Thursday when it announced a free aggregation service, powered by Yodlee Inc., to all comers through its American Express Financial Advisors unit. The New York card giant joins several other large institutions, including Citigroup Inc., J.P. Morgan Chase & Co., and Morgan Stanley Dean Witter & Co., in offering aggregation.
In light of consumer interest in account aggregation, bankers appear wary of using methods to block it.
Aggregation services today are being driven by customer desire, said Jay Spahr, senior vice president of e-commerce at Salem Five Cents Savings Bank in Salem, Mass., which introduced a Yodlee-powered aggregation service in August. They are the ones who want their information, and they provide us with their passwords and IDs. If institutions are going to put blocks on that, I am not sure that is doing a service to clients.
Henri Paul Rousseau, president and chief executive officer Laurentian Bank in Montreal, which this week announced it would offer aggregation through CashEdge Inc. of New York, compared Vyous approach to the defensive tactics that debit card networks adopted in their early days. These defensive strategies do not work, he said. At the end of the day, the clients decide what is right.
A spokesman for one of the largest banking companies in the country, who asked that his institution not be identified, called the Vyou product anti-consumer. Consumers should be able to choose who gets access to their information, because the information belongs to them and not to the bank, he said.
Vyou already offers versions of its technology in other industries. A museum uses Vyous service to show its collection of artwork while preventing people from printing, e-mailing, or copying it.
Catherine A. Allen, chief executive officer of BITS, the technology arm of the Financial Services Roundtable, said there are ways in which the Vyou service could be useful to banks. It could help keep illegitimate screen-scrapers away from financial institution Web sites, she said.
BITS is working with banks and aggregators to create a set of standards for direct information feeds between institutions as a way of eliminating the need for screen-scraping. But that doesnt mean that screen-scraping will go away, Ms. Allen said. It just means that there will be illegitimate aggregators.
Vyous technology prevents screen scraping, which is of interest to those companies that want to do that, but it prevents their customers from doing what they want to do, she added.
Octavio Marenzi, a managing director at Celent Communications, said restrictions on aggregation would irritate bank customers. It will be hard to explain to a customer why they cant use that service with a particular aggregator or bank.
But he pointed out that some banks already are attempting to achieve the same results they would get from the Vyou product. Banks are already trying to do this themselves by blocking certain Internet addresses from coming in, or by moving balances around. None of that is very effective.
Sanjeev Dheer, chief executive officer and co-founder of CashEdge, said that attempts to block the consolidation of customer information would transfer power from financial institutions to aggregators. Aggregation companies would be forced to tell consumers that their bank was preventing them from providing a complete look at their finances, he said.
Vyous service has arrived too late to be useful, he said. That train has left the station. Banks are not resisting aggregation. They are looking for ways to make it more secure and less complicated.
