Account aggregation

Account aggregation is a method that involves compiling information from different accounts, which may include bank accounts, credit card accounts, investment accounts, and other consumer or business accounts, into a single place. This may include a database or may be provided through "screen scraping" where a user provides the requisite account-access information for an automated system to gather and compile the information into a single page. Usually this database resides in a web-based application or in client-side software. While such services are primarily designed to aggregate financial information, they sometimes also display other things such as the contents of e-mail boxes and news headlines.

One of the first major account aggregation services was Citibank's My Accounts service, though this service ended in late 2005 without explanation from Citibank. Much has been said in the financial services and banking industry as to the benefits of account aggregation - principally the customer and web site loyalty it might generate for providers - but the lack of responsibility and commitment by the providers is one reason for skepticism about committing to those same providers. The service helps users to manage their money on the Internet (typical desktop alternatives include Microsoft Money, Intuit Quicken etc) in an easy to use manner wherein they get functionalities like single password, one-click access to current account data, total net worth and expense analysis etc. Multiple U.S. financial institutions and credit unions are providing the service, however most of the time a vendor, such as CashEdge or Yodlee, is the technology solutions provider.

Account aggregation has evolved with single sign-on at most major banks such as Bank of America. With SSO (usually implemented via SAML) major financial institutions are now expanding their aggregation services into new areas. Rich Presentment (getting all the information about a bill that you owe) is a service that uses Aggregation extensively, and can be seen at AOL, using AOL Bill Pay. Aggregation also powers applications such as Funds Transfer, New Account Openings, Card Based Bill Pay and so on.

Independent Financial Advisors are another group that account aggregators are beginning to focus their attention. Having seen increasing competition from the wirehouses and breakaway brokers, positioning themselves as their client's primary advisor is not as easy as it once was. Account Aggregation should be able to help many of these advisors gain the competitive edge by providing a look into their clients held-away, and non-managed accounts. Aggregators such as Advisor Exchange and CashEdge specialize in working with the advisor industry and provide historical, transaction level data that is normalized and reconciliation ready. Advisor Exchange is taking it a step further in an attempt to bridge the technology gap that faces small advisory firms. With the Advisor Exchange model an advisor will be able to aggregate clients accounts and then push the aggregated data in virtually any third-party application that a financial advisor uses to run his business. With this technology, and the need for advisors to differentiate their services, the aggregation industry is poised for explosive growth over the next 5 yeears.

No longer is Aggregation just a product, it is now the platform/engine upon which many new financial applications are built.

See also