Nine banks have licensed an account aggregation system from S1 to work with their S1 personal and business banking applications.
Powered by an aggregation "engine" from Yodlee, the system is aimed at small and mid-sized banks that need to remain competitive with larger banks but may be constrained by financial and IT resources, according to Steve Ely, senior vice president, worldwide marketing for Atlanta-based S1. "The momentum we're seeing shows that financial institutions recognize the value of data and payment consolidation."
The nine banks are Peoples Bank (Ohio), Savings Bank of Walpole (N.H.), Umpqua Bank (Ore.), Carroll County State Bank (Iowa), Lee County Bank & Trust (Iowa), Manufacturers Bank (Calif.), Private Bank of Minnesota, Southeastern Bank (Ga.), and Great Northern Bank (Minn.).
"Account aggregation is a powerful tool allowing Umpqua Bank to position ourselves within the wealth and cash management segment, providing increased service capabilities to our customers," according to Lani Hayward, senior vice president and director of marketing at $2.6 billion Umpqua Bank.
S1's account aggregation system allows consumers to consolidate and manage their entire financial lives, including banking, credit card, investment, 401(k), mortgage and other accounts they hold both with and away from the host financial institution.
The benefits of aggregation for financial institutions have proven to be significant. An October 2002 study conducted by Oliver Wyman & Co. found that aggregation resulted in a 6 percent lift in customer retention (94 percent for aggregation customers versus 88 percent for other online customers). The study concluded that over five years, account aggregation can boost per capita profitability by $150.
The Yodlee aggregation engine gathers user account information from 7,300 sources, using direct data feeds and OFX/QIF downloads. Once gathered, the data are cleansed, augmented and normalized, then integrated into the S1 Personal Banking and S1 Business Banking applications.
S1 Personal Banking enables consumers to enroll for online banking, view statements and check images, see cleared and pending transactions, transfer funds, and pay bills. S1 Business Banking allows business customers to receive an up-to-date view of business accounts and transaction activity, plus receive balance and payment alerts.
Online banking and aggregation continue to converge, according to Anil Arora, president and CEO of Yodlee. "Our relationship with S1 brings aggregation to a broader segment of the market."