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Single-password Portals set to be a hit with clients

As the financial services industry finally adapts to an online culture,

those at the cutting edge are gearing up to introduce the next stage. The

latest proposition addresses the challenge of bringing all a client&#39s

accounts on to one site using a single password.

The service, known as aggregation, is being brought to the UK by a number

of firms which have already found success in the US. One provider, Yodlee,

has more than a million users in the US and has a client list which

includes such names as Charles Schwab, Morgan Stanley Dean Witter and Chase


In the UK, it claims to have six major financial services players already

signed up and ready to go live over the next few months.

The concept of aggregation is not about becoming an all-round financial

services provider. Platforms with an aggregation service are simply

attempting to ensure that consumers use their site as their first port of

call for all online activities.

For example, with the consent of the client, a fund supermarket would be

able to provide access to all that person&#39s financial dealings from bank

accounts to loyalty card statements. The client would never need to go to

more than one site to view all their accounts, even though they may be held

with multiple providers.

Among other benefits, aggregation gives websites the chance to guarantee a

high volume of hits and ensure strong advertising revenues.

BT Finance Industry Solutions recently carried out a survey to determine

how UK consumers are set to receive aggregation. The research revealed that

most people are willing to begin using such a service although few are sure

of who they would trust with such a task.

BTFIS emerging technology manager Charles Juniper says: “BT&#39s research

shows there will be a tremendous demand for aggregation in this country. If

an aggregation service was launched tomorrow, there would be instant

adoption. The desire for this sort of service already exists.

“There is a misconception that British consumers are cautious when, in

fact, they are willing to embrace anything that makes life easier.

“What potential providers of financial aggregation must understand is that

consumers want impartiality and some will find this difficult to deliver.

Some organisations are going to have to alter the way they work.”

For the IFA market, the implications of aggregation may at first appear to

be negative. Aggregation will enable the direct consumer to manage their

accounts more easily and may make them feel they have less need for an


However, several UK firms which are looking to incorporate aggregation

into their services have already made it clear that they want to enable

IFAs to participate in any systems that they use.

As a result, Yodlee says it is looking to develop its service to encompass

IFAs. Describing how an IFA aggregation service may work, director Steve

Gibson says: “There would be some kind of authentication process where a

high-net-worth individual would nominate their IFA. The individual would

then specify which accounts that IFA could look at.”

Financial Technology Centre director Ian McKenna believes aggregation will

go much further for IFAs. He says: “It is important IFAs do not see

aggregation as a threat. It is only a threat if they do not embrace it. If

you can operate true aggregation and automation, you have the chance to cut

down a lot of costs. Aggregation could make a major contribution to the

success of the IFA community.”

McKenna points out that aggregation has a few hurdles to jump before it is

ready to take off in the UK. Most of the US aggregators use a method called

screen-scraping where, with the permission and passwords of the client,

they retrieve account details from various providers&#39 sites without

entering into any agreement with the provider.

But it is still unclear whether this system will work in the UK. McKenna

believes it will be much more advantageous for the industry to develop

co-operative aggregation systems where providers agree to make the

information available to aggregation platforms.

Inevitably, the next few months will see the launch of the first

aggregation service. Companies such as Egg and Fidelity have made it clear

they are in advanced discussions with aggregation companies, with both

likely to announce plans this summer.

But IFA aggregation may be a little longer in the pipeline and there is no

indication as to how it will be received.

Nevertheless, if issues of security and impartiality can be countered,

then a platform which claims to help IFAs cut their costs in an environment

of increasing pressure on margins should be sure to be met with open arms.


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