Yodlee’s data ambitions grow with AI tools and millennial apps

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NEW ORLEANS — Once a question mark, Envestnet's Yodlee data division has emerged as one of the technology company's shining stars, albeit one that will have to address growing security concerns.

The decision to buy the Silicon Valley data aggregator in 2015 for $660 million was steeped in controversy — Envestnet was criticized for overpaying and the company's stock promptly tanked. Skeptics wondered if Envestnet would get a return on its substantial investment and whether adding Yodlee would entice more financial advisers to its platform.

Three years later, Yodlee revenues are up 44%, the firm says. At its annual conference, Envestnet is showcasing new Yodlee services, fintech apps and touting data analytics as the centerpiece of its financial wellness strategy.

Envestnet introduced a new Yodlee machine-learning aggregation and analytics tool, Envision IQ, which will incorporate Amazon’s voice bot, Alexa.

The new offering focuses on how advisers and their clients "are going to consume information now and in the future," said Frank Coates, executive managing director at Envestnet | Yodlee. "Envision IQ is all about asking questions and getting answers, and people wanting answers quickly without going out of their way to get them."

Data analytics will continue to be a big part of Yodlee's future, Coates said.

"Advisers want to know about client events that are coming up or that they didn't know about," he explained. "If a client's data is being monitored, an adviser will know $100,000 was taken out of a retirement savings account even if the client doesn't tell them, or that a client just changed jobs, which will impact his future cash flow."

Yodlee also unveiled two new AI-driven personal finance management apps. OK to Spend reports how much cash a client has available to spend while AI FinCheck monitors a client's progress when it comes to spending, saving borrowing and risk protection.

The apps will be particularly attractive to millennials, said Envestnet vice chairman and Yodlee chief executive Anil Arora.

"This will help advisers connect to the next generation," Arora said at the conference's general session. "Millennials are tech savvy, don't mind sharing data, and want a hyper-personalized digital experience."

But Yodlee, along with other data companies, is facing increased scrutiny in the wake of last year's Equifax data breach and recent data privacy controversies involving Facebook and Cambridge Analytica.

Last week, Yodlee attempted to address these concerns by teaming up with two other leading data aggregators, Quovo and Morningstar's ByAllAccounts, to create a "Secure Open Data Access" information sharing framework.

Among its key principles, the framework attempts to settle the debate over which party is liable when a data breach or hack occurs.

But the framework will only work "if there is a robust enforcement mechanism behind it, such as in PCI-DSS for credit card information," says cybersecurity attorney Kenneth Rashbaum, a partner at the New York firm of Barton LLP. "The alternative is governmental regulation. Either the framework regulates itself and enforces its standards with penalties or the government will impose regulation on them."

Consumer confidence is the key to data aggregation concept, Rashbaum notes. But in the wake recent high-profile breaches, consumers have become increasingly wary, he says — for good reason.

"The journey of financial data in a sharing environment is fraught with peril because the data is vulnerable at each stop along the way, and in transit," says Rashbaum, who is working with the New Jersey state legislature on new cybersecurity laws. "There are many opportunities to intercept it or obtain it from its repositories."

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Data security Data privacy Customer data Machine learning PFM Envestnet Yodlee