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The Center for eBusiness@MIT welcomes you to:

Where is the ROI?April 17, 2002

Annual ConferenceApril 17-19, 2002

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Aggregation and Mobile Financial Services What Impact Will They Have And When?

9:15am – 10:45am “Where is the ROI in Financial Account Aggregation?

Dr. Michael Siegel – Principal Research Scientist, Sloan School of Management, MIT

Professor Stuart Madnick – Professor, Sloan School of Management, MIT

James A. Kuser - Vice President, Client Solutions Group, Merrill Lynch Wealth Management Services

Ruer-Er Chang– Vice President of Customer Relationship Management (CRM), Citibank

1:30pm - 3:00pm “Where is the ROI in Mobile Financial Services?”

Octavio Marenzi – Managing Director, Celent Communications

Blaise Heltai – Managing Director of Internet Strategy, FleetBoston Financial

Makoto Shibata – Senior Manager of eBusiness & IT Initiatives Division, Bank of Tokyo-Mitsubishi

Hiroshi Egami – Director and General Manager of eBusiness & IT Initiatives Division, Bank of Tokyo- Mitsubishi

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Aggregators: A Primer to The Promise

Stuart Madnick (smadnick@mit.edu) Michael Siegel (msiegel@mit.edu)

MIT Sloan School of Management

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What is an Aggregator?

• Transparently collects information-- with or without prior source arrangement

-- resolves contextual differences• Performs analysis

-- not merely gather information• Represents user

-- acts as agent for user

Aggregator

WebSources

User (or user program)

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Aggregator: Types & Examples

• Comparison Aggregator – Gather price information

• Relationship Aggregator – Integrate frequent flier mileage programs– Integrate financial accounts

• Intra-organizational Aggregator– Integrate separate departmental calendars

• Inter-organization Aggregator– Integrate information about a company from multiple

sources (financials, news, etc)

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Aggregation Strategy: Everyone Is Impacted

• Aggregator / Aggregatees:– Aggregators create new marketplaces & information spaces– Aggregatees need to be in these marketplaces

(external impact)– Aggregatees need data from these marketplaces

(internal impact)

• Needs to be part of every eBusiness and core business strategy

• Increasingly, organizations are both Aggregatees and Aggregators

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Aggregation StrategyInsights• Everyone impacted

• Aggregators not limited to price comparison

• Aggregators can be combined and aggregated

• Create new info spaces

• After-aggregation important

• Aggregators changes relationships

• Business models and market conditions continue to change

Implications• Be part of strategy planning

• Identify new applications and business opportunities

• Entirely new types of applications can be defined

• Who will own these spaces

• This must be exploited

• What relationship do you want

• Must be prepared for changes

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MIT Aggregation Research: Historical Perspective

• MIT Aggregation Project– Strategy, Application, and Technology of Aggregators– Active Participation of 15-20 MIT Research Students

• Awarded Patents for Key Aggregation Technology (1996)• Developed early Universal Banking Application – aka

Financial Account Aggregation (1998)• Research and Consulting Partners Include:

Citibank, Merrill Lynch, FleetBoston, Deutsche Bank, British Telecom, Banco Santander, ABN Amro Bank, PricewaterhouseCoopers, Suruga Bank

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Current Aggregation Research Topics • Aggregation Strategies

(esp. Financial Account Aggregators)• The Economics of Aggregation (ROI)• Regional Issues – Cultural & Legal

(USA, Europe, Japan, Latin America) • Global Aggregation – Opportunities & Challenges• Wireless Services and Mobile Aggregation• Semantic Issues in Aggregation• Open Aggregation & “After Aggregation” Services• Data and Integration Standards

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Universal Financial Account Aggregation: The Vision

Leading to a world where all financial transactions (e.g., bill payment, online shopping, banking, investment, credit) are all handled through a single portal.

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UserUser

FAFA

CitigroupCitigroupCredit CardsCredit Cards

MerrillMerrillBrokerageBrokerage

FleetFleetBankingBanking

CambridgeportCambridgeportSavingsSavings

Concept of a Financial AggregatorConcept of a Financial Aggregator

BROWSER

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FS FS #2#2

FS FS #3#3

FS FS #1#1

UserUser

Financial Financial AggregatorAggregator

First First CallCall

ExcelExcel

AdvisorsAdvisors

WizardsWizards

AgentsAgents

Account Account Analyst Analyst

Asset Asset AllocationAllocation

FinanciFinancial al SourcesSources

Other Internet SourcesOther Internet Sources

Intranet and Internet SourcesIntranet and Internet Sourcesand applicationsand applications

““After Aggregation” Services and After Aggregation” Services and TransactionsTransactions

UserUserInformatioInformatio

nn

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The Universal Financial Aggregator

Aggregator Aggregatees

Banks

Securities

Insurers

E-mail service providers

Real estatecompanies

Utilities

Payment serviceproviders

Credit Card Issuers

Online shoppers

Account aggregation- Summarize multi accounts- Classified each transaction

Product/service comparison- Compare deposits, loans, mutual funds, stocks, and Insurances- Compare fees, usability, security, and customer support

Account Management- Fund transfer between accounts- Management of EBPP

Wealth Management- Advice of asset management- Calculate of future profit

After aggregation services

Other financial data

E-Aggregation: The Present and Future of Online Financial Services in Asia-Pacific  Stuart Madnick, Michael Siegel, Hiroshi Fujii, Taeko Okano 2002

 

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Business Models for Financial Aggregators

• Players– Financial Institutions

– Portals

– Financial Software (e.g., eWise, Quicken, MS Money)

• Technology Providers– Financial Aggregation Technology

– Systems Integrators

• Aggregatees

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Universal Financial Account Aggregation: Is there an ROI?

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Things can go wrong…an example

CitigroupCitigroupCredit CardsCredit Cards

MerrillMerrillBrokerageBrokerage

FleetFleetBankingBanking

CambridgeportCambridgeportSavingsSavings

QUICKENUserUser

Financial InstitutionActs as Aggregator of Accounts …Ends up as back office for Quicken or other Application

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Industry Vision

James A. Kuser is a Vice President in the Client Solutions Group for Wealth Management Services at Merrill Lynch

Ruey-Er Chang is the Managing Director of eConsumer's eDevelopment team responsible for online banking and investing platforms at Citibank

Where is the ROI?