Account aggregation seemed almost too good to be true when it debuted in the late 1990s.
The service, also known as screen scraping, was considered the key to making one-stop online shopping for financial services work. Consumers could have all their account information gathered on one Web site, giving aggregators - preferably banks - an inside look at the customer's financial picture.
Then financial firms would make customers offers they could not refuse to consolidate all their financial information at the firm's site.
Unfortunately, for many banking companies that invested in the technology, "that value proposition never ultimately materialized," said Catherine Graeber, an analyst at Forrester Research.
That disappointing result can be explained by Forrester's April 2005 finding that only 17% of consumers like the concept of one-stop shopping. "Every time a new financial purchase need comes up, consumers start shopping," Ms. Graeber said. "That's just the way it is."
And the aggregation itself - often time-consuming and cumbersome to use - did not make up for the general lack of interest.
Some of the nation's largest banking companies, including Wells Fargo & Co. and Citigroup Inc., have already shut their services down, and Ms. Graeber predicts more will do so.
But Yodlee Inc., the industry's leading provider of such services, insists the picture is not so bleak. Peter Hazelhurst, the Redwood City, Calif., company's senior vice president of product development, acknowledged that activity was "pretty stagnant" a couple of years ago. However, "our usage has gone up 25% in the last year," he said. "We've had a lot of re-interest from a lot of major banks," including Comerica Inc. and Bank of America Corp.
Yodlee has direct relationships with 120 financial services companies, Mr. Hazelhurst said, and that number is growing.
This year the number of consumers using its aggregation service has increased to 7 million, from 4.5 million last year, he said. This month Yodlee released software that it says can be used to create a unified online banking service.
But experts say the real story of how aggregation is faring may be somewhere in between its rejection by some of the nation's largest banking companies and the rosy picture Yodlee paints.
Though aggregation shows signs of sticking around, it will be used on far different terms than originally intended, experts say. Rather than targeting the masses, financial services companies are aiming for a more select group, and some firms, recognizing the limitations of early aggregation services, have made them easier to use.
"It's up to the individual financial institution to make it work for them," said Marc Scheuer, the director of national sales and marketing for Comerica's wealth and institutional management division.
Comerica, which has been offering aggregation for about five years, changed its focus this year to exclusively target high-net-worth clients. The Detroit banking company had initially taken a very broad-based approach, allowing anyone with Internet access to aggregate accounts at its site. The service attracted about 1,800 users, though they were not necessarily consumers who did a lot of business with Comerica, according to Mr. Scheuer.
Starting in 2007, Comerica will allow wealth management customers with at least $750,000 of investable assets to access the aggregation service. (They will be added to the original user base, which will be grandfathered in.)
One new feature, AdvisorView, will allow Comerica's roughly 250 financial advisers to view clients' aggregated accounts to dispense advice and establish long-term goals and objectives.
Comerica hopes the new focus will increase the company's asset base. If the service brings in $40 million to $50 million of assets, the company can break even on licensing and other fees to Yodlee, its aggregation provider, after a couple years, Mr. Scheuer said.
"For us, it's an opportunity to upsell and establish deeper relationships with clients," he said.
Though AdvisorView is still in the pilot-testing stage, Mr. Scheuer said it is breathing new life into aggregation at Comerica. "I'm not sure we would have continued it without AdvisorView," he said.
Among the complaints that financial services companies have lodged about aggregation are that it raises security concerns and is not integrated with online banking programs. Before an institution gathers account information from banks or brokerages that are not directly linked to it, consumers must supply their user ID and password for all accounts. An aggregating institution can then lift a customer's information from another company's site - an aspect of the service that earned it the nickname "screen scraping."
"That's where the rubber meets the road," said Paul Vienick, a senior vice president and head of product development at E-Trade Financial Corp. in New York. "Most people don't want to give that out."
E-Trade has not offered the ability to aggregate accounts at other companies at its site, though customers have access to E-Trade Complete View, which presents real-time valuations of all E-Trade accounts. With that approach, "concerns about privacy all go away," Mr. Vienick said.
Through formal and informal discussions, E-Trade has found that customers don't like the idea of consolidating their account information in one place. "A significant amount of people just want to keep their money separated into different accounts," Mr. Vienick said.
For the last three years E-Trade has been offering a service called Quick Transfer, which it says accomplishes one of the goals of aggregation more efficiently than earlier services. The service lets customers to move money easily between E-Trade accounts and those held at other institutions.
Bankers say aggregation has been frustrating for customers, because it does not let them execute transactions from the aggregated accounts. Though users of earlier services could see information about all their accounts in one place, they usually needed a separate login to their online banking programs to conduct transactions.
But creating a more streamlined aggregation service may be worth the effort.
Last year Bank of America re-launched its service, making it accessible through a single login that also serves as the entry point to online banking. Previously, aggregation required a separate login from online banking, and users had to enter information manually. The new service automatically supplies information related to B of A accounts.
The changes have attracted more users. Since they were made the Charlotte banking company's enrollments have tripled, according to Betty Reiss, a spokeswoman. She would not say how many active aggregation users it has, but she said that 80% of those who are active access the service once a week, and one-third do so daily.
"The people who use it, use it a lot," Ms. Reiss said.
Compass Bancshares Inc. has also found that its active aggregation users are very active.
"They check in daily or close to it," said Charles Bretz, a senior vice president at the Birmingham, Ala., company, which has been offering aggregation since 2001. It has learned that aggregation is not for the mass market, and it has responded by targeting individuals who have complex financial lives, he said.
"If you have only one online banking account, you probably don't see the need for aggregation," Mr. Bretz said.
In the last year Compass has added alerts, a feature befit-ting the control-oriented personalities of its target group. The alerts advise users of changes in accounts they hold at Compass or other institutions - for example, balances that dip below a certain amount, or the arrival of direct deposits. Customers who are concerned about fraud can be notified of any new transaction involving their credit card account.
Compass runs electronic marketing campaigns targeting this group. "We've been successful in selling to our target market," Mr. Bretz said, though he would not disclose the number of users.
The company justifies the system's cost through the profitability of the customers who use it, he said.
Neil Platt, the vice president of sales and business development at CashEdge Inc., a New York provider of aggregation and other services, said it has noticed the same shift toward more sophisticated users.
"There's a transition away from retail banking and toward wealth management. That's really where aggregation is thriving," Mr. Platt said.
CashEdge offers a service for retail customers, but most of its aggregation business comes from financial advisers. It has about 8,000 representatives at large and small financial advisory firms using its software to aggregate information on behalf of their clients.
Mr. Platt said he is not surprised that aggregation never caught on with a mass audience. "The ability to see all your investments every day is not necessary, but you expect your financial adviser is looking."
Yodlee said it is aware the current form of aggregation appeals only to the top 10% to 20% of a company's customer base, and it is trying to change that.
The software it introduced this month, MoneyCenter, addresses some of the current limitations of aggregation by pre-populating account data and supporting account-to-account funds transfers, the company said. It also offers various financial management capabilities, such as budgeting, electronic bill payment, expense categorization, and automatic check registers.
The big difference from the past is that aggregated data can now be acted upon, Mr. Hazelhurst said. "We're moving from viewing data to augmenting and transacting with data."
