CAMBRIDGE, MASS.--Account aggregation has only just begun to reach its potential in the financial-services industry, according to academics and financial-industry players speaking at an annual MIT E-business conference here.

The concept of account aggregation--collecting and analyzing data from multiple Web sources--has been used by financial-service firms since 1998 to give customers one-stop access to multiple accounts while creating a holistic view of the customer. By hosting an aggregation portal, institutions can, in theory, strengthen their relationship with the customer while following customer transactions and relationships with competitors. Loyalty can increase, and the institution can cross-market its products and services that customers are using with competitors'.

Citibank has been among the leading account-aggregations firms, opening its MyCiti service for grouping accounts to even non-Citibank customers in hopes of stealing business from competitors. Now, says Ruer-Er Chang, VP of CRM at Citibank, the company is evaluating the return on investment for the concept to see if, in fact, the strategy is working.

But whether aggregation services prove successful in winning new business, it needs to be a part of every business strategy, says Michael Siegel, principal research scientist at MIT. Increasingly, organizations are creating new marketplaces and information spaces in which aggregation adherents need to be present not only to maintain a competitive presence with customers, but also so they can access the customer and comparative information the marketplaces collect. "We're leading to a world where all financial transactions--bill payment, online shopping, banking, investment, and credit--are done through a single portal," Siegel says. "This is the ATM machine of the 2000s. Maybe we don't have a choice and shouldn't count on just ROI."

But in most cases, the ROI is there. According to MIT research, a financial-service firm will lose money on an account-aggregation system for the first two years, but will begin to see returns grow exponentially in the years following. For instance, a $200 million firm that provides aggregation services to all its clients will lose up to $300 million in its first year after deployment, but by the fifth year will see $1.2 billion in returns.

Merrill Lynch says that the return on its aggregation strategy is that its financial advisers have total-portfolio customer information, information that includes customers' accounts with competitors. Thus armed, the advisers can cross-sell products and services. Clients benefit too, says James Kuser, a VP with Merrill Lynch. That's especially of interest for the company's strategy of serving high-net-worth clients--those with portfolios of $75 million or greater.

For those clients, Merrill Lynch is using an application created by vendor GreenTrak (which has since been acquired by Kinexus), which performs complete data downloads of account information rather than relying on traditional screen scraping. "This gives us a granularity of data," Kuser says. It also positions the financial adviser as the "quarterback" of a client's financial life.

That's something the company can charge for, while Merrill treats screen-scraped information as an entitlement to its customers. So even for customers unlikely to switch from other financial-service firms to Merrill, it still has the relationship. "Owning the client is key," Kuser says. "Once you own the client, you have ROI."