In response to reported consumer interest, banks have invested substantially in account aggregation services in 2001. Yet, despite the convenience of combined account summaries and single sign-on, few consumers have taken advantage of these services. In fact, institutions have been lucky to generate activation rates among aggregation subscribers of 10%.
But there is a market worth the attention of banks and the aggregation technology providers they work with. Gomez research shows that nearly two-thirds of Active Web Bankers (those who engage in at least one transaction at a bank's Web site each month) show "top-box" interest in account aggregation, as long as their bank offers it and integrates it with the account management offering.
Further, products from aggregation technology providers continue to bifurcate to serve two distinct segments--mass-market consumers and advisory clients. This division is on target as these two groups have very different needs, and thus are best served by two distinct technological approaches.
Mass-market customers typically have basic do-it-yourself tasks to accomplish, such as bills to pay and balances to monitor. Screen scraping and similarly robust data collection technologies may meet these needs--at least until scaling issues mandate conversion to XML-type data interchanges.
Advisory clients, on the other hand, benefit most from an aggregation offering that enables advisors to reach out and support them, keeping their holistic financial framework in mind.
In order to attract these two customer segments, and realize payback on their efforts in 2002, banks need to consider the following:
* Providers of mass-market offerings must integrate aggregation services with existing account management interfaces. Separating aggregation services from online banking keeps aggregation out of sight and out of mind. Rather, aggregation should enhance the balance views and general online banking activities customers already engage in and alert customers when there is an issue such as a late bill. This work is already beginning at a number of banks and will be a hallmark of implementations and reworks in 2002.
* The number of visits, page views, or time spent online doesn't reflect the value the client (advisory or mass-market) has extracted from the service or financial institution. Instead, alerts will provide much of the day-to-day value relative to payments due, balance levels and the like. Meanwhile, financial advisors will reach out to clients who expect their advisors to sort through the low-level data for them.
* The subscriber model will be challenged in both the advisor and mass markets. In the mass market, banks are already insisting that the leading provider, Yodlee, recognize the gap between subscribers and active users that has developed and provide a pricing model more closely tied to the economic benefit the banks realize.
Ultimately, hitting the sweet spot of consumer demand involves rethinking key metrics and the investment required before a bank and its aggregation technology provider can expect a return. A placeholder solution not integrated into the account management interface or, for advisory clients, the advisor relationship, will not gain adoption. Further, a strategy that emphasizes frequent visits also misses the value proposition of a service designed to make financial management more convenient.
Aggregation, both for the mass-market and high net worth clients, may not be an investment that all financial institutions will find worth making, but it is an investment worth making well.
Chris Musto is vice president of research at Gomez, Inc.www.gomez.com, a Waltham, MA consultancy that focuses on Internet Quality Measurement. Please send any comments or feedback to [email protected]