As the Web spins: from account aggregation and online financial advice to intelligence-gathering portals and more: a glimpse into the rapidly evolving future of financial services on the Internet.

• Author: Bernstel, Janet Bigham

As the information age matures, growing pains continue to resonate. Nowhere are they so apparent as in website development. Financial services institutions are now migrating in droves from the classic marketing-based information sharing website toward more intelligence-gathering portals. Dramatic changes are taking place in Internet and application design, and with over 31.5 million American households predicted to be banking online by the end of 2005 (according to eMarketer), who can afford not to keep up?

"We're moving from the more rudimentary processes of 'how to contact and open an account' to profiling an individual's financial state of affairs to and to actually having the transaction capabilities," explains Keith Stock, vice president and banking practice leader for Cap Gemini Ernst & Young, a New York-based financial services consultancy. Banks are doing this primanly with accounts within one institution, but sometimes with an aggregate of several institutions.

The shift toward more consultative relationships is part of an effort to increase wallet share with mass affluent and high net womb customers. Think of a future where the focus is more on offering financial planning solutions rather than individual products. Online document sharing, "co-browsing" and white boarding (where an adviser and client can view and mark up a Web page in synchronous time) could become routine.

"It's clear that we have to move as an industry to a more advisory relationship with customers, powered by technology," says Shaw Lively, research director for Massachusetts-based Financial Insights and author of "Self-Service Financial Advice: Reality Sets In." "In many cases it will be limited to pure customer-driven Self-service and others will be more toward the open platform for collaborative efforts where customer and adviser can work together."

Most websites, large and small, can't do these things yet. Customers are still only able to see small portions of their financial lives online at one time. According to Stock, though, the big institutions are currently investing heavily in portals that enable people to do more sophisticated transactions. He warms that mid-sized banks are at risk of falling behind and recommends seeking out an application service provider that can help them in hosting state-of-the-art portal capabilities. As customers become increasingly 'Net savvy, and batiks search for ways to deepen client relationships, account aggregation takes on greater significant.

"Account aggregation entered the market as a consumer-facing service, but that's only one component of its real power," claims Melanie Flanigan, marketing director for the Redwood City, Calif.-based Yodlee. "Banks and brokerages are now looking at this as a key piece of their enterprise infrastructure to power all kinds of risk, wealth management and banking applications."

Indeed, advisers are starting to drive consumer adoption of account aggregation higher, says Len Mangiaracana, senior director and general manager of wealth management for Yodlee. Speaking of Yodlee's wealth management product launched in December 2002 that provides the adviser with permission-based access to a client's online accounts at all financial institutions, he claims that the average "affluent client has nine to 10 accounts aggregated on the platform. "There's a lot of opportunity for banks to leverage account aggregation. They have the relationships, and it's time to start having the dialog with the investor about their broader financial picture."

Taking direction

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