The integrated account is a new e-banking idea and is gaining popularity.
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American banks are introducing the so-called integrated account to their offer. Thanks to this service, every customer receives their individual website containing all information regarding their accounts.
The crisis that has been decimating dot-coms worldwide since the middle of last year has also hit internet banks. Last week, the e-banking pioneer, the Irish-French first-e, was shut down. Earlier, the American Wingspan.com belonging to Bank One ceased to exist. Mbanx, founded by the English bank Barclay’s, no longer operates either. The business model implemented by these financial institutions has not proven successful.
Meanwhile, a new idea for electronic banking is successfully developing in the United States – account aggregation (integrated account). The bank implements special software that allows creating a private website for each individual customer, where they can find all news regarding their accounts – not only banking, but also investment or insurance. Proposing such a service requires its provider to conclude an information exchange agreement with other financial, banking, and non-banking institutions serving the customer.
From the customer’s perspective, the matter is very simple. A person using the integrated account enters their bank’s website, logs into the system, and can check their financial situation in one place. What is more, they can perform many operations across all institutions where they hold accounts using a single interface.
The providers of the new service do not have to be, and certainly will not be, only banks. This can be done, for example, by portals that combine the aggregated account with their standard offer – mailbox, payment models for purchases in their virtual stores. Supermarkets could also do this, as they have been acting as financial institutions to some extent for some time by issuing credit cards to customers.
This interesting idea is currently developing exclusively in the USA. Software enabling such customer service has already been purchased by Bank One and Bank of America, among others. City Bank has already implemented the account aggregation project and has been providing the service on the mycity.com website for a year and a half. It intends to bring it to Europe soon, starting with Great Britain. However, this will not be easy.
Recently, the results of research conducted by the Institute of Financial Services in this very European country were published. They show that most financial institutions are not prepared to provide such innovative services. One of the obstacles is the high cost of implementing the necessary software. However, this is not the most significant barrier. There is resistance against the wide exchange of customer information between many entities of the financial market and other industries, which is necessary in this model. Nearly 80 percent of potential providers believe that such activity requires special legal regulations. Concerns about data safety are also shared by potential users of aggregated accounts.
European banks are afraid of innovation. Research has shown that they are waiting for a pioneer in this field. Only after analyzing their successes and failures will they develop their own strategy for offering account aggregation (according to 76 percent of surveyed companies).
The new service allows improving customer relations. However, this is not traditional Customer Relationship Management (CRM). Experts describe it rather as Customer Management of Relationship (CMR). This means that software for creating integrated accounts changes the role of the customer in relations with financial institutions. It is no longer the banks that manage relations with the customer, but the customer themselves who shapes the relations with them.
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Anna Laśkiewicz