A one hit wonder?

A new type of service that could revolutionise the way we manage our finances is just months away from arriving in the UK.

Several banks are currently in discussions about setting up websites where people would be able to access all their financial information in one place - a sort of online one-stop shop that would pull together all your different holdings with different companies and present them on one easy-to-read page.

So instead of having to dig through files in search of a multitude of statements and documents, or logging on to lots of different websites, you would simply go to one site to view and monitor your current account, savings account, investments, mortgage, credit card and so on.

It is a bit like a hi-tech ver sion of a bank statement, except that it would be one that contains every single bit of financial information which is relevant to you.

This one-click access to all your financial information has been dubbed "aggregation" and - surprise, surprise - it's a US concept. Aggregation has been making waves in the US for a year or so, and it is estimated there are now around 1m people there using these services.

Now, as happens with most things over there, it's on its way over here. No one in this country yet offers data aggregation but online bank Egg said this week that it is "fully expecting aggregation to reach the UK market within the coming months", while Barclays says it is something it is actively working on.

Corillian, a leading e-finance software company, reckons that by early summer we will start to see one or more banks offering fledgling services.

Aggregation clearly offers the greatest benefits to those people with lots of online financial products. It could mean that someone with an online savings account, current account, credit card and share-dealing account with four different providers would no longer have to log on to each of these to check their current financial position - all the information would be available in one place.

However, many of the US services also allow people to input and update information about their offline accounts and things like loans or insurance in order to create a complete picture of the user's financial life.

In the US the services are typically run by big banks such as Citibank and Chase, and internet portals such as Yahoo! They are usually free and are updated every day. You can see what's in it for these companies - knowing everything about your finances puts them in a very powerful position and enables them to target you with offers tailored to your needs.

But the main reason why aggregation is likely to prove hugely controversial when it hits the UK can be summed up in one word: security.

How it works in the US is that when you sign up for one of these aggregation services, you have to give the company all your user names and passwords for the online banks and other sites whose details you want to add to your personal page. The techno-wizards running the service then enter these sites on your behalf, call up your up-to-date information and transport it back to your page - a process known as "screen-scraping".

The sites insist your passwords and financial data are kept secure and private but it's not hard to see why aggregation is a potential minefield. Giving out your user names and passwords to third parties is clearly fraught with risks and is something net users are told time and again they must not do. In fact, online banks warn their customers they could be liable for any losses if they don't keep their security details safe.

Growing numbers of Americans are clearly willing to accept the risk and give their log-in information to aggregation service providers, but as Ian Giles at Corillian points out, people in the UK are "a little bit more reserved and a little less trusting about giving out user IDs and passwords".

Rightly so, many might think, bearing in mind the spate of internet security blunders we have seen over the past few months, involving major players such as Barclays and PowerGen.

In fact, it's difficult to envisage the UK's financial watchdogs being happy about a system that involves people handing over their security details. So what's the answer? What seems more likely to happen in the UK is that banks and others offering these services will get to gether and agree to share customer information. That way, they would be able to obtain information on someone's holdings with another bank in a secure and controlled way. This is what is happening in Australia, where five or six banks are getting together to pass data down the line to each other where people have consented for this to happen.

Alternatively, Barclays says what may happen initially is that rather than giving out their security details, customers will have to type in their own information on the site.

Cahoot, the online bank launched last year by Abbey National, says that like other banks it is interested in the concept. But marketing director Tim Sawyer says he has serious concerns about security. Unless an official data-sharing system was set up, or another way was found to overcome these worries, he thinks Cahoot would be unlikely to take part in giving out people's information.

As things stand, there is nothing to stop a fraudster posing as an aggregator on the net and asking for people's user names and passwords, then clearing out their accounts and vanishing overnight with the loot.

Alternatively, if a legitimate site was broken into by hackers, who would be liable - the aggregator site, the individual for giving out their codes, or the person's bank for passing on their financial information?

There are clearly a lot of issues to iron out but most experts agree that aggregation is coming to the UK in some form. As we face more and more pressures on our time, and increasingly turn to the internet to fulfil our needs, the ability to get one-click access to all our financial information is likely to prove very appealing to many people.