Would you put all your finances in the blender?

Melanie Bien asks if you should consider account aggregation

The British are neither scared of technology nor of the risk of fraud, judging by the success of a service that lets you access all your online accounts, credit and store cards, loans and even mortgage on one internet screen using a single password. Despite recent warnings that fraudsters have been trying to gain access to customers' online bank details, business is booming for account aggregation.

The British are neither scared of technology nor of the risk of fraud, judging by the success of a service that lets you access all your online accounts, credit and store cards, loans and even mortgage on one internet screen using a single password. Despite recent warnings that fraudsters have been trying to gain access to customers' online bank details, business is booming for account aggregation.

Since First Direct launched Internet Banking Plus last Monday, 3,000 people have signed up.

"Considering this has been achieved without any marketing activity, it shows there is definite demand out there for this service," says Alison McMinn, spokeswoman for First Direct. "The vast majority of people who have signed up are customers, as we expected, but we have had several hundred non-customers join as well. So word of mouth is clearly playing a part."

Account aggregation does away with what First Direct calls "password purgatory". The free service works in the same way as Egg's Money Manager, launched two years ago, although the difference is that only Egg customers can use this.

Instead of giving your passwords and PINs to the account aggregator who accesses your details on your behalf - as is the case with Citibank's service, My Accounts - Egg and First Direct install a digital safe on your PC. The security details for all your various accounts are stored here. You call up this information using a single password, and the balance of each account appears on one page. To get into a particular account, you simply click through using the link.

Setting up the digital safe in the first place is tedious but you only have to do it once. You log on to the account aggregator's website (www. firstdirect.com or www.egg.com), enter certain details such as your name and address, and create a new set of log-in security credentials.

The digital safe is then downloaded on to your PC, storing your online IDs, passwords or PINs for the accounts.

The account aggregator never has access to your complete security and identity details, so there's no chance of an unscrupulous employee getting hold of this information.

To enhance security, when you log out at the end of a session, both Egg and First Direct's servers remove a random "chunk" of the safe, invalidating attempts to crack it. Also, you can get into your accounts only from the PC where your safe was created; you can't log on, say, from an internet café.

Moneysupermarket.com, the website that enables you to compare the cost of a range of financial services, also offers an account aggregation service called View My Accounts. This lets you include details of your travel insurance as well as accounts, loans and credit cards, and you also receive automatic alerts if there is a product on the market offering a better rate than the one you currently have. So, for example, if you are paying 16 per cent interest on your credit card, you will be told there are 0 per cent introductory offers available from other providers.

As security is such a concern for internet users, it is worth asking the aggregator exactly what protection you have if someone manages to hack into your accounts. An Egg spokeswoman says it has a "100 per cent fraud guarantee", so if you do lose any money, Egg will refund it. But she also points out that in the two years since Money Manager was launched, none of Egg's 170,000 registered users has been affected by fraud.

First Direct also offers customers a full refund if their details are accessed by a fraudster - as long as they didn't compromise security by not keeping their password safe, for example by writing it down.

BEFORE YOU TAKE THE PLUNGE...

* If the account aggregator asks for your passwords, check with the other companies with which you hold online accounts to ensure you will not be breaking their terms and conditions by passing these on to a third party.

* Check the account aggregator's privacy policy before joining. Some sell your details on to other firms for marketing purposes.

* Check on the aggregator's website to ensure that its systems meet high security standards. Ask if you are unclear.

* Ask what happens should something go wrong, eg if there is a security failure, if private information is disclosed or you lose money.

* The Financial Services Authority does not regulate account aggregation services. So ask the aggregator what it will do to sort out any problems that might arise.

Source: Financial Services Authority

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