Benefits of Seeing All Accounts in One Place
Consolidating all your banking, credit, investment, savings, and loan accounts, among others, on a single page can help you manage your money more quickly and efficiently. For example, knowing how much money is in your checking account while also being aware that you have an upcoming credit card bill or loan payment due means you’ll be able to set aside that payment without overdrawing your account. Seeing all your accounts together is convenient, especially with real-time transaction data at your fingertips.
Where to Find Account Aggregation Services
Bank websites and some online brokerage firms, such as Schwab, offer account aggregation services for their customers’ convenience. Personal finance tools like Mint, Mvelopes, and You Need a Budget allow you to see all your accounts in one place. Software companies like iBank (Banktivity) partner with firms like Yodlee, which provide financial data aggregation services, to offer more convenience to their customers. Even online tax software can offer account aggregation. Many smartphone applications for iOS and Android also aggregate accounts.
What to Look for in Account Aggregation Software
When choosing financial account aggregation services, it’s important that the software you select can access a wide range of financial institutions to include all your accounts. In fact, it should be user-friendly and, most importantly, secure.
How to Set Up Account Aggregation
To set up account aggregation, you first need to establish online banking relationships with the financial institutions that hold each of your accounts. You can then register each account on the aggregation platform. This is done through a setup routine where you specify the location of each financial account, along with the username or account number and password for each account, allowing the aggregator permission to view account details.
Security and Safety
Once you provide your secure login information to the software, the automated system collects the information in the same way you would if you logged in yourself. Account aggregation services give the software permission only to view your account balances and transactions, not to perform transactions. If you really want to access your money or transfer it, you’ll need to log in to each account’s website.
Additionally, the software benefits from various advanced security features. For example, if you are logging in from an unknown computer or device, additional authentication may be required.
However, you should always exercise extreme caution when providing your financial data to third parties, even if they maintain high security standards. The Financial Industry Regulatory Authority (Finra) warns consumers to think about the risks of sharing personal and financial data with data aggregators and cautions individuals to understand the privacy terms and conditions of any service provider they might use.
In any case, many people who actively manage their own money rely on account aggregation services for their convenience, ease of use, and security features. These services can save time without adding more stress to your financial management.
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Sources:
Charles Schwab. “Schwab Alliance.”
Envestnet Yodlee. “Data aggregation.”
Finra. “Know Before You Share: Be Mindful of Data Aggregation Risks.”
Source: https://www.thebalancemoney.com/what-is-account-aggregation-1293879
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