REDWOOD SHORES, Calif. – Aggregation provider Yodlee says it finally has some proof that there's a beneficial Return-on-Investment (ROI) to offering aggregation. While aggregation is one more online service that can add some stickiness to a CU's online presence, the wild card has always been ROI. Does a CU add anything to its bottomline by offering aggregation? Yodlee says it didn't expect the results it did get, but based on them, the answer is a resounding yes. In broad terms, Yodlee says the study proves there are three prime advantages to offering aggregation: it attracts the most profitable customers; increases the retention of existing customers; and increases the effectiveness of cross-selling. Yodlee came to these conclusions based on surveys of three large financial service companies (at press time Yodlee was not able to get the three to release their names), and modeling, which included some educated assumptions, done by Oliver, Wymand & Company, a strategic consulting firm specializing in the financial sector. As for hard numbers, the data show that over a lifetime aggregation users will be $100 to $200 more profitable than customers who may have a high affinity with the institution, including using other online products, but are not aggregation users Another interesting finding was that aggregation users tended to have higher approval rates of e-mail campaigns, up to two to three times higher, than online users who don't use aggregation. Jim Taschetta, chief marketing officer for Yodlee, says the study didn't specifically look to see if aggregation users were higher paper credit, but it looks that way based on the higher approval rate. Oliver, Wymand estimates that on a home equity line of credit product, aggregation users will have a 4.5% response rate, compared to a 2% rate for non-users. It bases this on a test it did with one of the large financials it analyzed. As for retention, Yodlee says conservatively the data found that aggregation users have about a 3% higher retention rate than online users who don't use aggregation. "Aggregation tends to help users deepen their relationships. They buy more products from the firm they have aggregation with," said Taschetta, and the more products, the less likely they'll change firms, he said. Interestingly, while the retention rate is estimated at about 3%, one of the three large firms that was studied saw a retention rate of 7%. "This is pretty breakthrough stuff for the industry. What we've been reading over the last 12 months is given the times we're in, every project needs some type of payoff in the short-term. Aggregation has that short-term payoff," said Taschetta. Of course even Taschetta agrees that aggregation can be better. He said it needs to be more tightly integrated with other functions, such as bill presentment, to really cement a user to the product. "We're about half way there," he said. As for Yodlee, it recently raised an additional $24 million in equity capital. It has launched two new products – Navigator and Octane – to help financials look at aggregation data of their customers, and use it to do target marketing. "You can drill down and look for instance for people who have an American Airlines frequent flyer account and a credit card with say an APR of 19%," he said. Yodlee has also received contract renewals from seven of its largest financial clients, including Fidelity and Chase. [email protected]

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