PFM: Platform For Customer Engagement

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The title of this post is the title of an Aite Group report I recently published.

I’ve been an analyst for 11 of the past 13 years, and throughout that time I have done everything in my power to avoid making predictions. I’m a prescriptive kind of guy, not a predictive one.

So when I say that 2010 will be the year of PFM (personal financial management), you know that I believe it. Sure, social media and mobile (or as @jpunishill proposes to call it: Mocial) will garner more press and attention, but the smart bankers (and credit union execs), while experimenting with social media, will make serious investments in 2010 to build PFM capabilities.

Why am I so convinced? Here are some of the highlights of the report:

PFM is having a significant impact on users’ financial lives. An overwhelming percentage of users say PFM has given them control over their financial lives, many are saying that they’re saving more money as a result of using PFM (and a majority of Gen Y users, I might add), and a good chunk are paying less in overdraft fees, late fees, and interest.

PFM is having a positive impact on users’ relationship with their banks (and credit unions). This is true, even though the vast majority of those we surveyed don’t use PFM on their bank or credit union’s site. Those who do use PFM on their FI’s site are even more likely to cite positive benefits to the relationship.

PFM offers banks and credit unions an opportunity to meaningfully engage with customers (and members). Facebook and Twitter are nice tools, but FIs need ways of interacting with customers in the context of their financial decisions. As consumers use PFM to not just aggregate accounts and track spending, but to assess their financial performance and look for advice and guidance on making smart decisions, PFM offers FIs a platform for engagement that Facebook and Twitter can’t offer.

If you have any interest in PFM, you should register for a webinar I’m presenting with Yodlee on March 10.

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