Account aggregation

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Account aggregation sometimes also known as financial data 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 be provided through connecting via an API to the financial institution or 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. The security of the account access details as well as the financial information is key to users having confidence in the service.[1]

The database either 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.[2]

History[edit]

The ideas around account aggregation first emerged in the mid 1990s when banks started releasing internet banking applications.

In the late 1990s services helped 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 got functionalities like single password, one-click access to current account data, total net worth and expense analysis.

Initial setback[edit]

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.

More providers[edit]

Multiple financial institutions and credit unions started providing the service, however most of the time a vendor, such as Yodlee (1999) or Pageonce (2007) became the technology solutions provider. While outside of the U.S. client-side account aggregation, provided by technology solutions provider eWise,[3] were adopted by financial institutions like Citibank and First Direct (owned by HSBC) in the UK, and Westpac in Australia.

Other account aggregation server-side services provider in Europe were Eurobits Technologies,[4] and Unnax Payments,[5] whose aggregation technology was being used by banks such as BBVA or Bankia, as well as by a growing number of independent web and mobile-based third-party PFMs (personal finance managers) providers, such as Fintonic[6] or Mooverang (Euroconsumers).

New applications[edit]

Account aggregation evolved with single sign-on (SSO) 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[edit]

Independent Financial Advisers was another group on which account aggregators began focusing their attention. Having seen increasing competition from the wirehouses, breakaway brokers and robo-advisor, positioning themselves as their client's primary advisor was not as easy as it once was.

Account aggregation helped these advisors gain a competitive edge by providing a look into their clients held-away, and non-managed accounts. Account aggregation providers such as Aqumulate,[7] Blueleaf,[8] ByAllAccounts,[9] Private Client Resources,[10] Quovo,[11] Wealth Access[12] and Ábaco[13] in Latin America specialize in working with the advisor industry and provide historical, transaction level data that is normalized and reconciliation ready.

Open banking[edit]

Starting in 2015 developments such as open banking made it easier for third parties to access bank transaction data and introduced standard API and security models.

See also[edit]

References[edit]

  1. ^ Penny Crosman (April 9, 2018). "Is Finra's dire warning about data aggregators on target?". American Banker.
  2. ^ Lowell Putnam (December 7, 2017). "Five Questions You Should Be Asking Your Account Aggregation Provider". Wealth Management.
  3. ^ http://www.ewise.com/
  4. ^ https://eurobits.es
  5. ^ https://www.unnax.com
  6. ^ https://www.fintonic.com/
  7. ^ https://www.aqumulate.com/
  8. ^ https://www.blueleaf.com/
  9. ^ https://www.byallaccounts.net/
  10. ^ https://www.pcrinsight.com/
  11. ^ https://www.quovo.com/
  12. ^ https://www.wealthaccess.com/
  13. ^ https://abaco.uy