RETURN ON INVESTMENT FROM ONLINE BANKING SERVICES: AN ANALYSIS OF FINANCIAL ACCOUNT AGGREGATION

Tereza Melo de Brito Carvalho and Michael Siegel

No 4384-02, Working papers from Massachusetts Institute of Technology (MIT), Sloan School of Management

Abstract: The successful adoption of Financial Account Aggregation requires a careful analysis of the business model. The business model must be defined in a way that provides value to both customers and financial institutions. This paper identifies business models for adoption of Account Aggregation technology; proposes a method for calculating the return on investment related to the adoption of this technology; and applies the proposed method to estimate this return for various business models. The results show how the return on investment is affected by parameters such as initial investment, customer acquisition and retention cost and product and service cross-selling. This analysis is applicable to financial and nonfinancial institutions considering Account Aggregation or other new online account application

Keywords: online banking; aggregation; account aggregation (search for similar items in EconPapers)
Date: 2003-01-27
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