The deal will allow Yodlee to provide a new and more secure payment aggregation service; the companies claim it goes a step beyond account aggregation. However, given consumers' current fears about online security, the service's prospects in the near term outside the US look dim. Even in the US, the service may be too advanced for the current market.
Yodlee and AZYGO have announced they will form a partnership to extend the technology platform underlying account aggregation services. The new technology should facilitate Internet payments, allowing for increased balance transfers through account aggregation sites. It will both provide customers with a holistic view of their online accounts and give them the tools to act on this information.
Yodlee is currently the leading global provider of technology for account aggregation services, with more than 90% of the US market. Yodlee provides the screen-scraping technology that allows multiple online accounts to be aggregated and accessed on one site through one secure password and login name.
Account aggregation is a relatively new phenomenon, and while there are currently 1-1.5 million customers who use this type of service in the US, it is not yet available in the UK. Account aggregation services have been launched in Australia, but uptake has been slow. Future demand for such services is also unclear, with global user forecasts for 2005 ranging from about 60 to 90 million.
While the idea behind account aggregation is great in terms of efficiency and time-saving, most UK consumers do not seem to be ready for this type of service, at least not yet. First, consumers in the UK have a limited number of online accounts; second, they are worried about Internet security. It therefore seems unlikely that a significant number of people in the UK would be interested in basic account aggregation services at this point in time, let alone a service that would allow customers to step beyond aggregation.
In spite of the Yodlee-AZYGO proposition being a good idea in theory, it may be far too early for such a service to make an impact on the UK market. And even though the US is more advanced than the UK in terms of online development, Yodlee's new proposal could be too advanced for this market.