account aggregation software

It’s a good thing our phones remember our passwords because there are an awful lot of them to keep track of these days. A consumer’s bank account, investment app, lending company, and more are often separate entities providing different information about aspects of the consumer’s financial health.

So what if an individual needs to have access to all of this information at the same time? That’s where account aggregation software comes in. Let’s talk about what this software is, why consumers need it, and how to pick the best one.

What Is Account Aggregation Software?

Account aggregation software collects an individual’s financial data from multiple accounts and consolidates it into a single platform. This means that clients and financial institutions can see bank, credit card, investment data, and other consumer or business accounts all at once. With this holistic view, it’s easy to analyze an individual’s financial situation.

How does it work? While account aggregation may only include data held within a specific financial institution, it can also pull information from outside the institution if the account holder gives permission. Data has historically been collected through screen scraping with a secure login, but increasingly data is aggregated using direct API connections to the financial institution that provides cleaner data and is more secure thanks to tokenized (rather than credentialed) access. While aggregators are moving in that direction, Finicity is already pulling 60% of its data through direct API connections.

Why Consumers Need Account Aggregation Software to Manage Their Financial Data

It’s Personal Finance 101: Consumers need to be able to see the big picture so they can make the best choices, big or small. That’s especially true when it comes to financial planning and management. Account holders and financial institutions alike need to see what’s going on in every aspect of the individual’s finances so that they can make the wisest financial decisions.

Account aggregation can help with financial management and planning. For example, with their financial data all in one place, an account holder can see that their investments are giving them a good return, but their credit card debt is counteracting that progress, making it difficult to achieve their goal of saving for a downpayment on a house. With that holistic picture, consumers can see clearly what they need to change to reach their financial goals.

Account aggregation is also important, for example, for families with multiple financial goals. They might be saving for retirement, college funds, and paying down their mortgage all at once. Having all of this data in one place makes it easier to keep track of each of those goals and their progress.

Other benefits of financial aggregation software include the following:

  • The ability to track personal and business expenses
  • Additional insights and analytics that aren’t possible without aggregation
  • The ability to plan and create budgets
  • Reminders and notifications for bills or large transactions 
  • Account monitoring for fraud and identity theft

For account holders and financial institutions, data is key to making the best financial decisions. Account aggregation is a huge step toward collecting and using that data in a way that leads to those wise decisions. What makes this possible? Account aggregation APIs.

Eight Things to Look for in an Account Aggregation API 

While an account aggregation API may not be on an account holder’s radar, it’s crucial for financial institutions, fintechs, and other financial service providers to pick the best one for their clients. Here are eight features individuals and financial institutions should look for in an account aggregation API:

  1. Provides accurate, clean data 
  2. Integrates with all the applications you need it to 
  3. Is compatible with the institutions most often used
  4. Has user-friendly features
  5. Has customizable data aggregation 
  6. Has a low cost to value
  7. Provides robust compliance and security features
  8. Offers great customer care and service 

Finicity provides transaction aggregation that uses an award-winning data access and insights API. This API functions as the building block of consumer-permissioned data, which is then presented to consumers in a user-friendly format. This data comes straight from financial institutions, so it’s accurate and ready to go.

Additionally, if you’re using it for lending, our transaction and statement aggregation is an FCRA-compliant solution that empowers the consumer to make sure it’s accurate. The key account information presented includes the following:

  • Transactions
  • Account balances
  • Investment positions
  • Loan transactions
  • Expense categorization
  • Normalized merchant name
  • Transaction descriptions

With all of this information visible with a single look, account holders and financial institutions can make better-informed financial decisions.

These days, there are a lot of financial services and accounts we need to access: bank accounts, investment apps, debt consolidation services, lending companies, and the list goes on. Since having a holistic view of our personal finances is crucial for making the best decisions, account aggregation software is a game-changer! Finicity offers account aggregation software that helps both consumers and financial service providers see that crucial holistic view. To try a demo and check out our data access and insights API for yourself, click here.