The promise of the Internet often falls short when customers are asked to fund the accounts they opened online by mailing a check. Redwood City, Calif.-based account aggregation specialist Yodlee Inc. estimates that 70% of these accounts never get funded as customers procrastinate or lose interest.

Yodlee is the latest solutions provider to address this problem. Its AccountOpening software for bank Web sites, branch kiosks and other digital channels enables new customers to open and fund account applications online in a single session using funds drawn from an account in another institution.

Customers enter their personal data and information that applies to current deposit or loan accounts at one bank. AccountOpening verifies the data and runs it through a scoring module that lets the bank tailor the terms of the offer in real time. Customers can see the actual balance of their source account so they can confirm how much they want to transfer to the new account.

“We’ve developed a highly customizable solution that can get customers applied, approved and up and running within five to 10 minutes with no use of the U.S. mail,” says Peter Hazlehurst, senior vice president of product development at Yodlee. “This makes banks considerably more successful in their account opening strategy.”

Yodlee has road-tested the approach with its existing Instant Account Verification product currently being used by such firms as E*Trade Financial Corp., according to Hazlehurst. He says AccountOpening is Yodlee’s competition for products like CashEdge’s OpenNow/FundNow.

(For more information about the CashEdge product see “The Latest in New Account Opening Solutions” in the September 14, 2005 issue of BAI Banking Strategies Retail Delivery Insights.)

AccountOpening clients can write their own user interface with the company’s supplied software development kit or have Yodlee host the entire user experience, according to Hazlehurst.

“In the past, software providers in this space have tried to build a ‘one size fits all’ dynamic workflow system,” Hazlehurst says. “Our clients tend to be larger banks and they want customizable solutions.”

Hazlehurst declines to discuss Yodlee’s return-on-investment (ROI) expectations for AccountOpening or the product’s pricing structure. He says that a chance to improve online account openings beyond the current 30% success rate would have definite benefits for financial institutions.

Dan Schatt, a senior analyst at Boston-based Celent, a financial services consultancy, says Yodlee’s new product represents an advance over its previous focus on account aggregation, a technology enabling customers to aggregate their financial data from multiple providers on one institution’s Web site.

“There hasn’t been a clear ROI strategy with aggregation. Here, you have a more modular strategy, which may be a better value proposition to the banks,” Schatt says.

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