WASHINGTON - As account aggregation wins converts among financial services companies hoping to tap a potential gold mine of cross-selling opportunities, the soul-searching over appropriate business practices continues to produce some unexpected results.

The experiences of KeyCorp, for example, indicate that banks risk alienating customers if they use the platform for anything but the softest-touch efforts to cross-sell, a finding that called into questions one of the central attractions for adopters of aggregation.

KeyCorp, which is based in Cleveland, has been mulling how to use information gleaned from customers' aggregated account holdings since the company took a June survey of its customers.

The findings of that survey, said Mickey Mencin, senior vice president of electronic services at the banking company, spurred it to reconsider the goals of its aggregation service, which is expected by yearend.

Aggregation provides rich insight on customers' activities with other financial institutions. But KeyCorp's online survey of more than 1,300 customers found that they do not want to use account aggregation if it will lead to a barrage of marketing messages about new products, Ms. Mencin said. Focus groups found that customers were against banner ads, targeted ads, and opt-in marketing, Ms. Mencin said at last week's Thomson Financial Media aggregation conference. KeyCorp did not want to make them angry, she said. "We want to be a trusted aggregator."

They findings came as a shock to some at the conference, particularly since H. Thomas Carter, an e-finance analyst with U.S. Bancorp Piper Jaffray, had told them that most of the profits from aggregation would lie in the cross-selling opportunities.

Octavio Marenzi, managing director of the consulting firm Celent Communications in Cambridge, Mass., said cross-selling is a primary reason that financial institutions are getting into aggregation. Financial institutions need not abandon cross-marketing, as long as it done subtly, Mr. Marenzi said.

"If it's just brazen advertising and obvious that the bank is using confidential information about the consumer, then it won't work," he said. "But if a bank does it in a way that is clearly working to the customer's advantage, such as offering them a lower mortgage rate than what they are paying, then it will work."

KeyCorp does not plan to do any cross-marketing on its Web site based on information gathered from aggregating customer accounts, but it will use the information to prepare its brokers and relationship managers, Ms. Mencin said.

"My opinion is that the way we are going to make money is through offering advice," she said. "Aggregation opens up the content, and we can now encourage customers to opt to work with a relationship manager."

Another surprise in KeyCorp's findings was how little customers understood about the process of aggregation.

"Customers thought there was going to be this big love fest, and that First Union, Wells Fargo, and KeyCorp would just share this information with each other," Ms. Mencin said. "It raised a lot of eyebrows when they discovered that often aggregators get the data without the source's knowledge."

As KeyCorp prepares to roll out its service, consumer education will be paramount, she said. Banks have spent a lot of time over the years teaching people not to give out their personal identification numbers, she said. "Now we are going to tell them to give us all of their PINs and we will pull all of your information together."

KeyCorp is still in discussions with a number of vendors about offering an account aggregation service, Ms. Mencin said.

"We are taking baby steps first."

Despite the controversy, financial institutions seem to have embraced account aggregation. Its use by such giants such as Chase Manhattan Corp., Citigroup Inc., and Merrill Lynch appears to have defused the issue somewhat.

Charlotte, N.C.-based First Union Corp. was alone in drawing attention to the issues of customer security and privacy raised by aggregation as far back as December, when most other financial institutions were still struggling to figure out what aggregation was and whether they should participate.

First Union, which also plans to introduce an aggregation service this year, has been focusing on privacy and security concerns raised by "screen scraping" - that is, lifting a customer's data from a Web site without the site owner's knowledge.

"We are taking the standards that financial institutions are held to and saying that aggregators have to operate at this level," said Gayle Wellborn, director of customer advocacy for e-commerce at First Union.

Ms. Wellborn is co-leader of BITS, and is heading a committee to address best practices in aggregation. BITS, the technology arm of the Financial Services Roundtable, is nearing a Nov. 8 deadline to create industry guidelines on aggregation and also has committees on security standards, customer education, legal and regulatory issues, privacy practices, and technology.

"I really credit First Union for its thought leadership in this area of aggregation," said Catherine A. Allen, chief executive officer of BITS, at the conference. "Because of their sharing of information with us on the topic, other large financial institutions have done the same."

Aggregation is the process by which all of a customer's financial account information is consolidated at one site. Aggregation companies have warmed to a set of standards that First Union created last December, Ms. Wellborn said. But the market's fast growth has increased the difficulty of enforcing the standards.

"We don't have the bandwidth to sit and do this process with every aggregator that enters the market," she said in an interview following her speech at the conference last week. "I went to BITS and raised my hand and said, 'This is an industry issue, and this needs to be treated at an industry level.' "

First Union's own guidelines stipulate that the banking company be able to identify and track aggregated transactions on its Web site, and that aggregators make only inquiries - not initiate transactions - on behalf of First Union customers.

First Union also requires aggregators to sign binding contractual agreements and to consolidate information in a way that protects its confidential nature, by providing end-to-end audit trails and adhering to privacy standards.

Other guidelines stipulate that customers' log-in and authentication information be protected, that aggregators agree to limits on sharing information with other parties, and that the customer authorize the service only after receiving full disclosure about it.

Since most consumers do not understand how aggregation works, customer education and disclosure are top priorities.

"This is first and foremost a customer issue," Ms. Wellborn said. "Consumers say, 'Oh, you get my information from First Union -you must have a relationship with them," but that might not be the case."

Educating consumers may be the most challenging aspect of aggregation, since many lack the patience to read through pages of material, Ms. Wellborn said.

"You have about 30 seconds to educate consumers, because they don't want to go through all the issues," she said. "Yet there are a lot of issues."

Ms. Wellborn's BITS working group is discussing policies related to how financial institutions and aggregators should disclose how the process works and which parties should be responsible for resolving customer problems.

The working group also is considering periodically auditing each of the aggregation companies and certifying their compliance with the guidelines.

BITS is considering playing a key role in the certification process. Aggregation companies would register with BITS and provide details about their aggregation methods, such as the times that they pull data from Web sites and the Internet addresses that they use to obtain the information. In return, BITS would give the aggregation companies the opportunity to validate whether their methods work with particular financial institutions.

"Possibly we could create a relationship where they provide the information to us and we would, in return, provide it to the financial institutions," Ms. Wellborn said.

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