Yodlee Inc., the screen-scraping pioneer, is courting controversy again, with a service that will enable account aggregators to mine customer account data from rival companies.
Until now, aggregators — which collect customers’ disparate account information so it can be reviewed on a single Web page — could not analyze information that comes from rivals. But Yodlee has been testing an enhancement designed to do just this for customer relationship management. Today it plans to announce the technology’s general release.
Given that Yodlee, of Redwood City, Calif., has transformed its image from pirate to white knight in the two years since developing screen scrapers — it now wins plaudits from industry technology leaders — there may be less furor this time around. But it is too soon to tell.
Jim Taschetta, Yodlee’s chief marketing officer, dismissed the potential for controversy. “I think everyone understands this becomes a pretty powerful tool,” he said.
Yodlee clients were “absolutely not” afraid of exposing their customers’ information to competing aggregators, Mr. Taschetta said. In fact, the opposite tended to be the case, he said. Reactions took the form of: “My gosh, this is a pretty powerful tool. We’d better be sure we are moving quickly to take advantage for ourselves.”
As for the risk of privacy abuses, he said, aggregators “treat this with the same sensitivity that they treat their own data.”
Anil Arora, the president and chief executive of Yodlee, said that some Top 10 banks are piloting the service, and another 15 clients are preparing to.
Bank of America Corp., a leading proponent of aggregation for customer service, has looked at the new Yodlee service but made no decision, a spokeswoman said Friday. Wachovia Corp., whose predecessor First Union Corp. mounted a legal challenge to a competing aggregation service over security issues, has decided for now not to use it, a spokeswoman there said. Both emphasized the importance of respecting customers’ privacy.
“Our clients using this see it as a competitive advantage,” he said.
“It has not been possible to get this level of intelligence by any method that we’re aware of, and we know this area,” Mr. Arora said in an interview last week.
Yodlee says it has 90 clients live with its aggregation technology, including giant banks such as Bank of America, Citigroup Inc., and Wachovia; brokers such as Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., and Charles Schwab & Co.; and portals including the Microsoft Network, Yahoo! Finance, and America Online.
Collectively, those 90 clients have three million aggregation customers, representing $90 billion in aggregated assets, Yodlee says. Until now the clients have used aggregation for customer service and retention.
But “this was just the tip of the iceberg,” Mr. Arora said. “We have always envisioned this initial solution as solely a means to an end. We are realizing more of our vision.”
Mr. Arora described one potential marketing application: “We know we are one of the four credit cards in your pocket, but you’re not using us.” The top card may be tied into the user’s airline mileage program or a competitor may be offering a lower interest rate because the user also does brokerage business with it. “That simple level of intelligence allows you to personalize the offer for a credit card,” he said. “Here is the basis for you to go and increase your share of wallet.”
Some companies may give short shrift to the holder of a $25,000 account if it wants to focus on the affluent market segment of $500,000 and up. But if it knows this customer has a $2 million account with a competitor, it can “treat the customers based on their potential,” Mr. Arora said.
The suite includes a desktop application called Yodlee Navigator, which marketing departments can use to analyze customers’ aggregated data, and one called Yodlee Octane, which employs a business’ existing CRM software to produce targeted marketing campaigns.
Mr. Taschetta said that companies can use the results in a variety of ways: to generate lists for direct mail, produce targeted e-mail campaigns, and program targeted pop-up ads.
The tools also are compliant with customers’ privacy preferences, so those who “opt out” do not receive unwanted marketing messages, he said.
Analysts said they viewed the enhancement as a logical next step for Yodlee and a welcome development for marketers, but they questioned whether the performance of CRM would live up to its potential any better now than it has before.
“You want to be the aggregator and not the aggregatee,” said James Van Dyke, the research director in charge of financial services practice at the research firm Jupiter Media Metrix in New York.
The way Yodlee has structured the capabilities, Citibank, for example, would be able to study the data from customers who aggregate at My Citi, but Citi customers who aggregate their information elsewhere would be making their Citi accounts potentially visible to a competitor.
Still, Mr. Van Dyke said he sees benefits for both the customer and the institution. “When you allow this deep mining of information, you can figure out what people want, where you can save them money, where you can save them time, and get them to buy more from you rather than your competitors.”
But the service is unlikely to stir the furor that aggregation itself did a couple of years ago, said Shaw Lively, the research manager of the e-finance group at International Data Corp., in Framingham, Mass.
“Everybody knew this was going to happen eventually,” he said. “That’s why they got all torqued about it in the first place.” In addition, many of the privacy and security concerns that attended the early days of aggregation now are more settled issues, he said: “Now it’s clear, click this box if you want your information shared with other affiliates.”
The question remains open how much information customers actually are aggregating, and whether that information will truly prove useful to the institutions. Ariana-Michele Moore is an analyst at Celent Communications of Boston. She questioned the sophistication of existing CRM services, noting that the impediments that hobbled direct marketing in the past — incompatible databases, “siloed” information, and the confounding complications of mergers — are likely to continue to present problems.
“Many of them don’t have that sophisticated CRM solution, so they are not able to take advantage of the data feed,” she said. For those that master the technical challenges blocking cross-selling, “opportunities like that can be realized, and that’s pretty cool.”
