Account aggregation, which banks were hot to introduce a year and a half ago, appears to be in a deep freeze.
Announcements of new contracts have dwindled to practically nil. Researchers say consumer interest is anemic. And serious questions are being raised about whether providing aggregated accounts will ever pay off.
Even so, banks that have invested in the technology remain committed, and even enthusiastic about its potential. In that respect aggregation is faring better than wireless, another much-hyped technology that made the rounds in 2000 and now is clearly falling out of favor.
Were extremely bullish on account aggregation, said D.R. Grimes, who as chief executive officer built NetBank Inc. into one of the most successful banks on the Internet. Aggregation is the most important thing that NetBank and the industry is going to do over the next couple of years, he said. It is the cornerstone for our success in the future.
NetBanks announcement in 2000 that it would offer aggregation came just as the rest of the industry was starting to latch on to the service after months of soul searching about the propriety of lifting customer information from other companies Web sites.
Though there are still security and privacy concerns, many banks decided they had to get into the act when confronted by the specter of getting screen-scraped by their competitors.
The risk, Mr. Grimes said in an interview last week, is if the customer winds up doing aggregation with somebody else and NetBank does less business with the customer as a result of that.
But Forrester Research Inc. of Cambridge, Mass., says the chances of customers switching just for aggregation are grossly exaggerated. In its research, only 3% of life insurance customers and 2% of brokerage customers said they might switch providers for that reason.
Firms that successfully offer aggregation wont steal customers easily, Forrester said in a July report.
Even those that gain some new customers or retain current ones by offering aggregation will not make money off them that way, Forrester says. The fees that banks must pay to vendors more than $70 per user initially and about $36 after three years, under the most prevalent model are just too steep.
Though banks say they will be able to make up the difference by cross-selling more products, Forrester does not buy it. Banks not only lack the skills to cross-sell but have already squeezed out as much benefit from retention as they are going to get, just by persuading customers to bank online, the firm says. In fact, at the going vendor fees, providing aggregation to online customers wipes out the retention value they already have, Forrester says.
None of this seems to have deterred bankers from embracing aggregation.
Tom Wolf, a senior vice president at RBC Financial, a unit of Royal Bank of Canada, said aggregation is an important way to enhance its relationships with its 1.9 million online customers.
Royal officially rolled out its aggregation service, My View, in mid-January, after completing up a pilot test with 400 customers and staff members. The results of the test were heartening, Mr. Wolf said 87% of the participants said account aggregation met or exceeded their expectations, and 84% said they were likely to sign up for it.
He said aggregation is part of the next phase for Royal now that 31% of customers with automated teller machine cards are banking online with it. Because we have critical mass, it is worthwhile to provide value-added services, Mr. Wolf said.
Royal may charge for services that would accompany account aggregation, such as funds transfers, but for now aggregation fits into a bigger picture: We have a big market share of online customers, so its very important for us to build strong online relationships, Mr. Wolf said.
KeyCorp adopted aggregation more as a defensive measure, said senior vice president Paul Ayers, its manager of online services. A fundamental principle of our online banking case is account retention, he noted.
Still, the Cleveland company has been pleasantly surprised at the results, he said. The more than 10,000 customers who have enrolled for the Complete Picture service introduced in September is four times as many as expected, Mr. Ayers said.
Patrick J. Swanick, the president of KeyCorps retail bank, said the company recognized the difficulty of recouping the per-user fees that go to the third-party aggregation provider. To address that problem KeyCorp devised an interesting bundling of services that combines aggregation with unlimited bill payment for the same monthly fee, he said. Customers pay the fee whether they use both services or just one.
We didnt want to offer aggregation services for free to anyone who comes to the Web site, Mr. Swanick said.
Canadian Imperial Bank of Commerce, which started pilot testing an aggregation service, Total View, last week, is also well aware of the difficulty of cost-justifying it but is fully committed nonetheless. Its an expensive service, acknowledged Corinne Charette, the senior vice president of its Internet channel, retail and small business banking.
The test, expected to end March 31, will guide CIBC in marketing and packaging the service. The test results may change certain variables, such as whether the bank will charge a transaction fee or make aggregation part of a bundled service, and whether to market to all customer groups or just some.
But the results will not discourage CIBC from offering aggregation, Ms. Charette said.
Were committed, she said. We believe its a core online capability. The long-term goal is for customers to make CIBC their online banking portal of choice and place more of their assets with the bank, she said.
NetBank, where 5% to 10% of checking account customers are using aggregation, is not so concerned about making it pay off right now, Mr. Grimes said.
I can tell you without doing an analysis that were not making a lot of money on it, he said. But at the same time I believe it is crucial to maintaining a larger share of our customers financial services wallet in the future.
Mr. Grimes blamed the recession and the reduction in banks discretionary spending for slowing aggregations progress in the past year.
I hope the banks are just putting the projects on hold, he said. If theyre not, Im concerned that somebody is going to be successful in aggregation. The banks have a great opportunity to be the leader in that, and if they dont, somebody else will be.
Deborah Bach contributed to this article. 
