Personal Financial Management 4.0: Moving Forward

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The latest issue from Online Banking Report, “Personal Financial Management 4.0: Moving Forward With The Most Misunderstood Financial Service of the Online Era,” is available for immediate download (by subscribers) or individual purchase (for non-subscribers).

This thought-provoking report argues that while personal financial management (PFM) is the most important part of online/mobile banking going forward, it’s time to stop thinking of it as “product.”

“PFM is part of every single thing you do when communicating account info to customers,” says Jim Bruene, the report’s author. “The paper statement is a PFM tool. The call center is a PFM tool. Even the branch helps certain customers with their financial management.”

But those old-school tools have limitations, Bruene cautions. They are expensive, difficult to customize, and aren’t always timely.

Fortunately, there’s good news for retail financial institutions. “Unlike record stores, newspapers, and travel agents, banks and credit unions have a much better chance to stay relevant and hold on to their market share,” Bruene say. “Other than a few early adopters, customers simply will not entrust their money to internet-based startups. And even if they wanted to, it’s often too much of a hassle to make the switch.”

Bruene argues that as long as financial institutions keep innovating in online/mobile delivery, keep prices in check, and provide decent service, there will be no compelling reason for customers to leave. A big part of the needed innovation is in helping customers stay plugged into their financial situation, and helping them improve it. Those things can all be lumped together and called PFM.

“But that’s just the tip of the PFM iceberg,” Bruene says. “There are dozens of needed new features to bring online banking up to 2012 expectations.”

Among the topics covered in the 54-page report:

  • The business case for PFM
  • 23 primary PFM functions
  • 40 promising PFM features
  • 100 additional potential features
  • PFM forecast (U.S. household usage by PFM type)
  • PFM availability at the 30 largest U.S. banks and credit unions, including a deeper look at Citibank’s PFM tools
  • Mobile PFM
  • PFM for couples
  • Putting it all together in multiple service bundles, including fee-based premium options

This report is available only through Online Banking Report, and is available for immediate download.

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