Account Aggregation

As the number of online banking accounts has grown, online banks have begun to promote their account aggregation services.

Account aggregation is an electronic service that pulls together your savings, loan and retirement account balances at multiple financial institutions into one display (while maintaining your separate accounts) to provide a comprehensive snapshot of your assets and liabilities.

Account aggregation can also be used to view other balance information, including your utility bills, cell-phone minutes or frequent-flier miles.

For example, if you have a $2,500 checking account at one bank, an individual retirement account of $35,000 at a second bank and a $150,000 balance in your company-sponsored 401(k) plan in another account, you may find it convenient to aggregate these accounts to help you in your asset allocation or other investment decisions.

If the same feature shows your 35,000 miles at Southwest Airlines and 1,000 minutes left on your Verizon cell phone plan, you may have a service that's worth paying a few dollars a month to receive.

Account aggregation uses a "scraping" technology to compile your personal information. To get started, you need to select a financial institution to host your account. Next, you need to authorize each institution to share the information with the host institution.

Account aggregation has been somewhat slow to take off, but there are still some in the banking industry that continue to invest in its future and ensure that the technology addresses privacy and security concerns. Others, however, are giving up on the concept largely due to customer indifference and new account authentication procedures.