Bank of America has invested an undisclosed amount in account aggregator Yodlee.
Bank of America has announced that it plans to offer account aggregation services using software developed by its technology partner Yodlee. The free service will be launched later this year and will allow the bank’s online customers to manage their various Internet accounts on BoA’s Web site: MyBankofAmerica.com. Bank of America will also serve as the lead investor in Yodlee’s fourth round of VC funding, acquiring an undisclosed equity stake in the tech vendor.
By partnering with an external vendor, BoA is bypassing the hassle of developing and deploying aggregation technology in-house. In addition, BoA will be able to work with Yodlee to develop more customized solutions supporting the bank’s business model. Yodlee too has a vested interest in steering BoA in the right direction, particularly as BoA is now also a major investor.
The partnership allows BoA to take advantage of Yodlee’s account aggregation software, offering the bank’s customers more financial control over their multiple accounts by viewing them on a single site. The aggregation technology will allow BoA to harvest customer information that will enable to company to execute much more efficient marketing programs. Yodlee’s aggregation solution could be a key contributor to an online bank’s ability to reduce customer churn rates and maximize the bank’s wallet share of each online consumer.
BoA’s business challenge will be to differentiate itself from its competitors who have already launched account aggregation services. The Yodlee partnership puts BoA in a unique position to accomplish this goal. Yodlee’s customized technological solutions should allow the bank to differentiate itself as well as seeing increased customer profitability, as long as it successfully leverages this alliance. Other financial services institutions should now consider entering similar partnerships in order to ensure their success in the online sphere.
