More aggregation alliances shakeout; early adopting CUs seeing mixed results

INDIANAPOLIS – As another Internet solutions provider popular in the credit union space makes a deal to offer account aggregation to its clients, the question of member interest in the product remains. At press time,VIFI, Indianapolis, has partnered with aggregation firm uMonitor to offer aggregation to its 160 financial clients, 155 of which are credit unions. “I think we will see a third to a half of all our clients adopt aggregation within a reasonable point of time. I think it’s a technology where financials can see this as something that draws people online. It can help credit unions cement the position as being the PFI for their members,” said Mike Winter, president/CEO of VIFI. Winter said while the technology has obvious retention potential, it sill isn’t “even on the radar screen” for some financials. uMonitor President/ CEO Dinesh Sheth said credit unions have been a fertile market for aggregation, but the firm’s goal is not to sell directly to them. “The goal is to find more and more VIFIs so we can partner to reach many more people,” said Sheth. “Though I was a very good member of a credit union at one time, I personally must admit I didn’t have a depth of knowledge of the credit union space,” he said. What he has learned is that CUs are hungry for new technology. When it comes to new technology, the method for aggregating accounts is old admits Dinesh. “The large amount of it is still through screen scraping. We have enhanced our technology, and are getting very reliable data from screen scraping. We are doing what we can to get direct pipelines into institutions, but it’s a very slow process.” Sheth said uMonitor aggregates information from approximately 5,000 different Web sites. The VIFI-uMonitor aggregation solution will carry an upfront $10,000 installation cost for VIFI clients, plus a per user fee of around $1. uMonitor and Yodlee are the two leading aggregation firms in the CU industry. Yodlee has partnered with groups such as MEMBERS Development and Callahan Credit Union Financial Services, while uMonitor’s partners include Vertical Innovation and now VIFI. The question of member interest still remains. For answers, Credit Union Times looked at adoption number of three of the earliest CU adopters of aggregation – Boeing Employees’ CU, Bellco FCU and Patelco CU. All three of these CUs are using Yodlee’s aggregation solution via a partnership with Callahan Credit Union Financial Services Limited Partnership. According to Sharon Simpson, vice president of marketing for Callahan’s, two of the CU’s are seeing strong adoption. Bellco has 15,545 members signed up; Boeing has 9,536; and Patelco brings up the rear with 2,200. Steve Briton, director of marketing for Boeing Employees CU, said BECU’s aggregation success has come with very little marketing. “We haven’t done a lot. We’ve just done a little marketing in our newsletters,” said Briton. Briton attributes the success to the power of aggregation and BECU’s membership. “I think it’s a great product. We have a technically savvy membership base that are strong online users,” said Briton. Bellco FCU also said it did very little marketing to net its aggregation users. But Bellco also had up-to-date usage data at press time that paint quite a different picture of member adoption. Although it has over 15,000 members signed up for aggregation, only 1,692 of those signed up had logged on in the last 30 days, said Kathleen Demma, marketing director for Bellco. “It shows that a lot of our members visit the site and when aggregation had a prominent position they at least signed up, but you only have those 1,700 using it. We’ll have to revisit it,” said Demma. Demma said Bellco’s upcoming marketing push will revolve around self-service, of which aggregation will be a key factor. “Maybe we can get more of them to use it regularly.” John Henry, president/ CEO of MEMBERS Development, said MDC will begin rolling out its aggregation product in October with an initial group of 20-30 CUs. MDC’s aggregation offering will come in three flavors. The premier product, which will cost in the $50,000 range, will include the CU’s branding, full-function aggregation, including airline miles, etc., as well as “Advisor Share”, a feature that will allow a CU member to share their financial snapshot by giving them access to their aggregation account. This feature is available in uMonitor’s product as well. “Advisor Share allows the member on an opt-in basis to share their information with a personal financial planner, which has obvious financial planning advantages,” said Henry. The second-tier MDC product will be a pooled product. This will have the core functionality of aggregation, but not all the bells and whistles of the premier product, said Henry. Though he wouldn’t give out pricing information for competitive reasons, he said the pooled product is considerably cheaper than the $50,000 price tag of the premier product. Yet a third MDC product would basically be a referral discount. Credit unions that want to work directly with Yodlee can take advantage of an MDC discount. Henry said there’s no telling how aggregation is going to shake out. “It’s natural for people to want their accounts to be consolidated. It’s an evolving space. I think there’s going to have to be more than consolidation, people want to do things with the data,” said Henry. Things such as asset allocation exercises; net worth calculations, etc. [email protected]