Should You Parlay Your Passwords Into a Personal Financial Portal?

If a complete stranger approached you on the street and offered to take care of all of your household chores -- free of charge -- if you would just hand over your house keys, would you?

Curiously, that's the premise behind a number of businesses competing in the relatively new Internet arena of "screen scraping." The idea is to consolidate all your financial accounts -- bank, investment, credit card, travel awards, etc. -- in one convenient place. Think of it as your own personal portal from which you can see all your finances at a glance, balance and rebalance accounts, make investments, pay bills -- even collect voice mail and email.

Yodlee, one of the leaders among these account aggregators, currently offers such a service through a variety of partners, including Alta Vista, Intuit (INTU Quote), America Online (AOL Quote) and soon Chase Manhattan Bank (CMB Quote). Other contenders include Corillian (CORI Quote), EZ Login, VerticalOne and ebalance.

How do their services work? You just hand over your user names, passwords and account numbers. The screen scraper then logs into your accounts, grabs the info and presents it to you.

Some of the drawbacks of this arrangement are painfully obvious. For one, your personal portal becomes "a repository of your personal behavior," and this has caught the collective eye of marketing companies, says Steve Hoffman, senior vice president of product development at Home Account, a provider of Internet banking, credit card and other financial services. That can work to your advantage if you want to learn of new products that you may find useful, but if you value your privacy, this may raise concerns. (Yodlee says it will not share your information without your permission.)

More worrisome, these aggregators to whom you are handing the keys to your kingdom are not bonded, licensed or regulated. And they're not exactly household names. Their aim is to work behind the scenes, making their technology available through trusted consumer brand names, like America Online or Chase Manhattan Bank, with whom you may feel more comfortable sharing your passwords.

Or maybe not. Giving out your password to anyone is a potential security threat. Add email and voice mail to your account, and, well, someone out there -- and it isn't your nosy neighbor -- could come up with an awful lot of information about you.

"The issue with aggregators is you're trusting someone else to keep all that [information] safe. The danger is if someone figures out how to hack into their site, then your information's toast," says Roger Thompson, technical director of malicious code research at the International Computer Security Association. There are no regulations governing these information gatherers. "They're saying 'Trust me,' and you don't know a thing about them. Maybe they're good and maybe they're not," he says. But if they're not, "It's a single point of failure." In other words, one screw-up and all of your accounts become compromised.

For their part, the aggregators say they post and adhere to privacy policies and maintain rigorous security standards. "We're providing the most-secure and private offering we can," says Steve Shaw, a spokesman for Beaverton, Ore.-based Corillian.

In a few years, account-aggregation services are going to become fairly commonplace, with more than 6 million users by 2003, according to Celent Communications, a research and consulting firm for financial services providers. Perhaps users see any risks as a reasonable tradeoff for the convenience they get in return. "Consumers are asking for it. The research that we've seen says that there's a demand for it," says Corillian's Shaw.

The Supermarket Advantage

But if you really want to see the "big picture," financial supermarkets, such as those offered by Charles Schwab and Fidelity, may be a safer alternative. You can place all of your investment accounts at one of these giant brokerages, and they'll track your earnings/losses, bill payments, debit card and charge card transactions. You can either view each of the features on separate pages, or wait for the monthly statement and get a panoramic view of your entire financial landscape. Plus, while you're online, you can make transactions to rebalance your portfolio or move money from one account to another. You can't do that from an aggregator's site.

At the end of the year, or just before April 15, if you're looking for a cheap (or perhaps costly) thrill, you can download your 1099 and other tax forms these accounts generate into tax-preparation software like TurboTax.

These financial supermarkets are heavily secured, Thompson says.

But the drawback to this alternative is that you may not have -- or want -- all of your accounts consolidated with one financial services provider.

Do Your Own Scraping

A solution that accommodates your security concerns and allows you to mix and match financial services providers is to do the consolidating yourself on your own hard drive using Quicken or Microsoft Money software.

Both of these leading software packages allow you to do essentially what the screen scrapers do: visit all your accounts periodically and download all your financial information into one place -- but without having to share your passwords with anyone. Security is in your own hands, so you're safe ... aren't you?

Perhaps not. If you enter chat rooms or visit Internet discussion groups and download porno or other temptations, you may be opening up your PC to backdoor programs that allow hackers access to your entire hard drive without your knowledge whenever you're online, says Thompson.

But you can protect your personal information by installing up-to-date anti-virus software, preferably one certified by the ICSA (see the listing on its Web site) because those packages will catch these backdoor intruders. (Backdoor intruders are not considered viruses because they do not replicate and therefore may not be included in many anti-virus programs.) Thompson also suggests installing a personal firewall and/or personal intrusion-detection system such as ZoneAlarm (www.zonealarm.com), which is free for home use, or BlackICE (www.networkice.com), which is available for a fee.

So while there are ways to keep your financial matters private, there doesn't seem to be a perfect solution for seeing your finances at a glance. You'll have to weigh the pros and cons of each service and reap the benefits and protect against losses. Not much different from investing!