Personal Financial Management: A Platform for Customer Engagement
Report Summary
Personal Financial Management: A Platform for Customer Engagement
Four in ten PFM users are saving more money as a result of using PFM.
Boston, MA, February 24, 2010 – A new report from Aite Group, LLC looks at the state of personal financial management (PFM). Based on two Aite Group surveys - one of 976 current PFM users conducted in January 2010, and one of 74 bank and credit union executives conducted from October 2009 through January 2010 - the report reveals that PFM has provided users greater control over their financial lives, enabling many to save money and reduce the amount they pay in overdraft fees and interest. In addition, using PFM has enhanced the relationship that many consumers have with their banks and credit unions.
PFM tools aren't new, but a perfect storm has renewed focus on them for 2010: The state of the economy has forced people to become more disciplined about managing their finances, the Internet has made it easier than ever to get data into PFM tools, and Gen Yers have become more involved in managing their financial lives.
The benefit to financial institutions offering PFM tools is as significant as the tools are to users. Aite Group's survey of PFM users reveals that a quarter of all PFM users admit to being less likely to switch their banking relationship as a result of using PFM. Among consumers who use PFM on their bank's or credit union's site, that percentage goes up to 30%.
"Aite Group believes that both consumer and FI trends point to an opportunity for PFM to become something much more than just tools for budgeting and tracking expenses," says Ron Shevlin, senior analyst with Aite Group and author of this report. "It has the potential to become a platform for customer engagement, where consumers can evaluate the performance of their financial lives and interact with other consumers and financial providers to make smart financial decisions. To succeed with a PFM offering, however, financial institutions must ignore existing ROI figures and give it the marketing muscle they put behind tools like online banking."
This 42-page Impact Report contains 38 figures. Clients of Aite Group's Retail Banking service can download the report.