British banks have been advised not to rush into launching account aggregation services to riva...
British banks have been advised not to rush into launching account aggregation services to rival Citibank's new account aggregation offering. The caution came from Benjamin Ensor, senior analyst for Forrester Research, who believes aggregation won't take off until aggregators offer analysis, advice and execution, rather than just what he sees as 'a single view of a customer's accounts'.
Ensor stressed Citibank's competitors shouldn't hastily follow suit or try to prevent their customers from using Citibank's service. He argued that aggregation won't take off quickly because potential users will worry about privacy, security and liability, and be reluctant to hand over passwords to all their accounts. Furthermore, aggregated banks won't stand to lose many customers, said Ensor, because aggregation gives customers a way to stay with their existing suppliers while enjoying the convenience of a single view of their accounts.
Ensor also warned that attempts to block aggregation will backfire. He said: "Banks like Abbey National that want to block account aggregation, fearing lost customers and strained servers, will only annoy their clients. Even though these banks question the legality of handing over passwords, they can hardly sue their own customers. Instead, they should co-operate with aggregators to provide secure, live data feeds."
Ensor conceded though that Citibank has a unique opportunity to develop a new kind of relationship with the UK's early adopters. To generate revenues from aggregation, Ensor thinks Citibank must go beyond simply gathering information and empower customers to act by offering Open Finance-best-of-breed financial services combined with rich advice and the easy electronic movement of money. As part of this, he reckons Citibank must offer online financial advice.
Citibank became the first bank to launch account aggregation in the UK last month and users of its 'My Accounts' service can aggregate accounts from more than 50 different UK providers, from banks, credit-card companies, loyalty schemes to email accounts.
Scope for change post-Brexit
To tackle liquidity issues
More than £100m in pipeline
DB data published last week
'Heavily influenced by Morningstar'