By James Langton

(December 18 – 16:50 ET) – Account aggregation is being touted as one of the key online services for financial services firms to offer, but new research from Forrester Research Inc. says that few consumers want it and even fewer appear willing to sign up for it.

Forrester’s Kenneth Clemmer predicts that less than 3% of households in the United States will sign up for online account aggregation services by 2003, due to limited demand and privacy and security fears.

Forrester finds that, “While many consumers could benefit from using online aggregation, few are interested and even fewer will do so. Only wired consumers with experience managing their finances electronically and a stated interest in aggregation will be among the early adopters.”

This conclusion arises from a new study based on polling of U.S. and Canadian households by the Internet research house. Forrester finds that although more than 60% of consumers would like to have a consolidated view of their financial lives, they want easy, real-time aggregation from a firm they already use and they don’t want to pay much for it.

Banks, brokers and Internet portals are all vying to use aggregation services as a key client attraction and retention tool, while the portals also hope to create a revenue stream from advertising and cross-selling opportunities. The dilemma for financial firms is whether they aim to become aggregators, or they concentrate on allowing easy aggregation of their data.

So far, Forrester says, banks are in the lead but they haven’t won the race. More than 50% of consumers cited banks as their preferred aggregator, compared with only 17% for brokerages and 15% for mutual funds.

“Banks have an advantage over other possible aggregators because they specialize in two of the three transactional accounts that consumers most want to aggregate (chequing and brokerage), and they have “existing relationships’ with more consumers than any other type of financial firm. But banks shouldn’t rest easy: more than 75%of consumers who state a preference for their bank as aggregator would also consider other types of firms.”

However Forrester also found that consumers won’t switch firms or pay much for aggregation — while they may pay $1 a month, they wouldn’t pay $5.