1 The Center for welcomes you to: Where is the ROI? April 17, 2002 Annual Conference April 17-19, 2002

2 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

3 Aggregators: A Primer to The Promise Stuart Madnick Michael Siegel MIT Sloan School of Management

4 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 Web Sources User (or user program)

5 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)

6 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

7 Aggregation Strategy Insights 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

8 MIT Aggregation Research: Historical Perspective MIT Aggregation Project –Strategy, Application, and Technology of Aggregators –Active Participation of 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

9 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

10 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.

11 User FA Citigroup Credit Cards Merrill Brokerage Fleet Banking CambridgeportSavings Concept of a Financial Aggregator BROWSERBROWSER

12 FS #2 FS #3 FS #1 User Financial Aggregator First Call Excel AdvisorsWizardsAgents Account Analyst AssetAllocation Financial Sources Other Internet Sources Intranet and Internet Sources and applications “After Aggregation” Services and Transactions UserInformation

13 The Universal Financial Aggregator AggregatorAggregatees Banks Securities Insurers service providers Real estate companies Utilities Payment service providers 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

14 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

15 Universal Financial Account Aggregation: Is there an ROI?

16 Things can go wrong…an exampleCitigroup Credit Cards Merrill Brokerage Fleet Banking CambridgeportSavings QUICKENQUICKEN User Financial Institution Acts as Aggregator of Accounts … Ends up as back office for Quicken or other Application

17 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?