Account Aggregation Software: What it Is and How to Choose It

Account Aggregation Software
Account Aggregation Software

Over the last 10 years, account aggregation has essentially become a cornerstone in personal financial management. Whether you’re a financial institution, financial advisor, entrepreneur, or just a conscientious individual, providing and/or having quick, easy access to a single view that presents and analyzes all of a single customer’s financial data is rapidly becoming an essential offering.

What is Account Aggregation Software?

Account aggregation software collects financial data from various sources, including banks, credit cards, and investment accounts, and consolidates it to a single platform to provide a holistic, easily viewed and analyzed perspective on an individual’s finances.

Benefits of Account Aggregation Software

The myriad benefits of account aggregation software include:

1. Financial Insight

The primary benefit of account aggregation is the ability for consumers to access their account information and financial insights, anytime, anywhere. Better insight means better-informed decisions, which means better relationships and more opportunities to generate additional revenue.

2. Less Legwork, Less Questions

Having information that is always up-to-date and available online means no manual data updating, gathering, or filing, which significantly saves time, improves collaboration, and reduces client confusion.

3. Expanded Service Offerings, and Revenue

By providing you with a full, unfiltered picture of a client’s financial situation, account aggregation software allows you to view “held-away” assets and provide more comprehensive advice and guidance to your customers.

What to Look for in Account Aggregation Software

The exploding use of and interest in account aggregation software has led to a proliferation in the number of solutions available on the market. If you’re not sure what to look for in an account aggregation solution, then the process of identifying the right provider could be painful and costly.

Here are the four main things to look for in an account aggregation solution:

1. Breadth of Data and Connections

There are tens of thousands of data sources in the world and hundreds of thousands of account types with a nearly unlimited number of transaction types, most of which are not supported by any sort of industry standard format. Thus, the aggregation system exposed to the greatest number of variables will be the most successful in normalizing the financial dataacross different institutions.

Data aggregators essentially grow smarter the more data they have and the more customers and accounts they incorporate, so the power of an account aggregation solution directly corresponds with the size of its network.

2. Ease of Use

It doesn’t make much sense to invest in account aggregation that’s too complicated to employ to its full extent. Your account aggregation solution should make it easy for your customer to set up their accounts and get started. Tools that enable instant account verification and account aggregation should be turnkey solutions that drive adoption and loyalty.

3. Data Cleanliness and Accuracy

Your account aggregation platform should be able to intelligently aggregate, cleanse, augment, and store consumer data. Data quality takes years to develop and has a lot to do with the number of sources from which your platform is pulling data. Banks, credit cards, investment vehicles, loans, mortgages, insurance, bills, loans – all of this needs to be included.

Also, the platform should be able to aggregate a wide range of data from a large number of providers using both structured and semi-structured formats, including HTML, OFX, and custom feeds. The account aggregation platform’s online transaction processing system database should always be updated with the most recent data collected, and the platform’s service-level agreements should enable developers to integrate with rich financial and transactional data through RESTful APIs.

4. API offerings

A good account aggregation software solution offers a variety of APIs to account for the myriad use cases of financial advising and account aggregation. Your account aggregation software should offer:

  • Account Verification API – The platform should have a verification processes that is fast, efficient and secure that will activate users now – not later. This process will securely confirm available funds in accounts in real time before funds transfer, helping reduce abandonment during consumer onboarding for funding events.
  • Categorization – Your account aggregation software should have a transaction categorization engine that analyzes and categorizes each incoming transaction. For example, if you know that a particular merchant is a restaurant, a credit card transaction from that merchant can automatically be categorized as a restaurant. Categorization creates deeper customer insights to allow you to provide more targeted offers and services to your customers.
  • Geo-Location – Geo-location allows you correlate transaction details with physical locations, such as a merchant name to an address.

Why Yodlee?

Yodlee is one of the first companies to offer large-scale account aggregation and has connections to more than 15,000 financial data sources, including more than 1,000 companies with more than 22 million registered users and hundreds of millions of transactions.

Other key advantages of our account aggregation software platform include:

White Paper: How Retail Banks Can Leverage Financial Data Insights

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