By improving customer relationships, banking aggregation services are poised to become a major part of UK online banking. Two weeks ago, Egg launched Money Manager, the UK's first service to aggregate balances for retail bank customers. Citibank has now unveiled a similar service, although it has taken a subtly different approach.
Citibank's previous incarnation of its My Account aggregation service took a server-based approach and required explicit permission from online banks to aggregate bank account balances from their customers to stay within the confines of the Computer Misuse Act.
The service lacked co-operation from the major UK retail banks, which saw aggregation as competition to their own online banking ventures. Jonathan Mindell, sales and marketing director at Citibank, said, "The obvious gaps in My Account were the high-street banks, which were unavailable."
To overcome this, Citibank has applied Egg's experiences to its own services. Two weeks ago, Egg was able to launch Money Manager without requiring explicit support from other online banking services.
Egg managed to circumvent the Computer Misuse Act with Money Manager by taking a user-centric approach where the users store their bank account details on their own PCs using a secure ActiveX control. To update balances from other accounts, users press a button on the Egg site.
Citibank hopes to improve on Egg's lead by storing users' bank account details securely on its own servers.
Robert Courtneidge, a partner at law firm Osborne Clarke, who consulted on the new Citibank service, said, "The PC solution [from Egg] does overcome the Computer Misuse Act but I cannot see the purpose of the Egg [ActiveX] applet."
He said that in Citibank's latest model, the customer's login details for their other online bank accounts are stored on a Citibank server in what is, effectively, a secure electronic vault. Since only customers have access to this secure store, the Citibank service does not infringe the Computer Misuse Act.
Along with Citibank's own online accounts the My Account service now supports 13 online bank accounts from rivals including Abbey National, Barclays, Lloyds TSB and Nationwide.
Mindell said that, unlike Egg, Citibank's My Account aggregation service is not restricted to financial institutions. "We can aggregate users' e-mail accounts, news wire [access], frequent flyer miles, online bills and shopping."
Last week, Nigel White, a senior consultant at APACS (the Association for Payment Clearing Services), who headed the group's banking aggregation committee, urged banks to form partnerships and develop service-level agreements to create secure aggregation services.