The Internet puts all kinds of information at your fingertips. You can check your bank or brokerage-account balance, shop, pay bills and more. But with each firm having its own Web site, your fingers have to do a lot of work going from page to page — not to mention the challenge of remembering all those passwords.
No longer, as Benjamin Patch is finding out. For a year now, the 29-year-old employee of a software company is one of a small but growing number of people logging on each morning to a personal Web site for an up-to-the-minute tally of their net worth: assets, liabilities and even airline mileage awards.
This is different from the customized pages of news, e-mail and advertising cobbled together by Internet service providers. Patch’s personal site shows volumes of sensitive and private financial information, access to which only he can authorize. The speed and scope of the service is impressive. Consumer advocates, citing privacy concerns, say it is frightening.
A single page shows how much Patch has on account at Bank of America, how much he owes AT&T on his cell phone bill, how much he is earning on his three Vanguard mutual funds.
His accounts with Visa and MasterCard — companies with completely separate Web sites — show up right next to each other. So do the mileage awards from rival airlines American, Northwest and United.
Access to all this can be had via cell phone or handheld computer, and bill-paying functions are coming soon. It’s free and you no longer have to remember a slew of different passwords.
“Instead of going back and forth and back and forth, all this stuff is right there,” says Patch. “It’s like my own personal portal.”
Citigroup Inc. last month became the first big financial institution to roll out its version of this product, called My Accounts, on its Web site.
More big names, including Merrill Lynch & Co. and Chase Manhattan Corp., are working on similar products. Media companies, including America Online Inc. and CNBC.com, a unit of General Electric Co., also are jumping in.
The technology has been available to consumers for a year or more through a series of little-known startups called “screen scrapers.”
The dominant players include Yodlee Inc., a closely held Redwood Shores, Calif., company and VerticalOne, a unit of Atlanta-based S1 Corp.
These companies take your secret passwords — which you have to be willing to turn over — and “scrape” your most secure financial information, from bank accounts to mutual fund statements, onto a single Web site. The information is updated all day long. The only thing you need to remember is the password to your page.
For months, bankers watched in dismay as these upstarts threatened to steal their Web traffic.
First Union Corp. filed suit against one screen-scraper for improper handling of customer data, an action that was later dropped. Now, the banks are paying the scrapers to weave their technology onto the banks’ own Web sites.
“Nine months ago, nobody had ever heard about this stuff,” says Octavio Marenzi, a managing director at consulting and research firm Celent Communications. “Now, the whole financial-services industry is abuzz about it.”
Yet consumer advocates are nervous about the technology, also known as “aggregation.”
The service, most concede, is relatively free from the threat of hacking. But when combined with last year’s repeal of laws separating banks, brokerage firms and insurers, they say, aggregation puts an alarming degree of information and power into the hands of big financial conglomerates.
“The privacy implications of this are huge,” says Frank Torres, executive director of Consumers Union in Washington, D.C.
Although the scrapers say they offer the technology to big banks or brokerage firms only on condition they won’t sell information to third parties, the institutions themselves may use the data. Signing up with a bank’s aggregation site can give a bank detailed knowledge of your assets or debts at rival companies. Merrill, for one, says its sales force won’t look at that unless you specifically say they can.
But Chase says it will reserve the right to refer to that information unless you specifically say it can’t. Say, for example, you own several mutual funds at another company. Chase would be able to call to pitch you one of its own funds.
“I’d be pretty upset with that,” says Patch.
So rule one for consumers should be to make sure you know the institution’s policies, and make it clear if you don’t want your information used as a tip sheet for account representatives.
“You are turning over the ability to allow somebody else to have access to your private files,” says Marc Rotenberg, executive director for the Washington-based Electronic Privacy Information Center.
“You have to think about all the possible consequences of that.”
The recent shakeout among online retailers underscores these concerns. A defunct retailer called Toysmart.com, for instance, recently tried to sell its database of customer names, addresses and credit card numbers — even though the company had promised never to do so. Walt Disney Co., a majority shareholder, is now offering to buy the list and “retire” it to avoid an action filed by the Federal Trade Commission.
Remember that screen scrapers don’t have just one piece of information about you. They potentially have it all.
If this sort of thing bothers you, people familiar with the technology say, sign up with a big, healthy bank or brokerage firm, which is more likely to offer a product developed by a firm with a good chance of surviving an expected shakeout.
“Just like other startup categories, we have a gazillion of these companies now, but at the end of the day, we’ll probably have one or two,” says Erik Strasser, a general partner with venture-capital firm Mohr, Davidow in Menlo Park, Calif., who has been testing the technology.
Still, Strasser and others who use the service say the benefits outweigh these concerns. Not only is all your financial information collected at one site, but you also can keep track of accounts and passwords for a slew of online retailers including everybody from Borders to Brooks Brothers. Consumers then can link right into these sites and go shopping, without typing in another password.
The number of people using the “screen-scraper” technology is expected to grow to 7.5 million by 2003, up from roughly 400,000 today, according to a study by Celent Communications.
“There is a clear consumer need for this to be a service,” says Strasser, the venture capitalist. “I don’t think you can really stop this.”
