8/12/2014
Bank Director :: Personal Financial Management Tools Help Customers Help Themselves
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YOU ARE HERE: HOME > ISSUES > TECHNOLOGY > PERSONAL FINANCIAL MANAGEMENT TOOLS HELP CUSTOMERS HELP THEMSELVES
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Personal Financial Management
Tools Help Customers Help
Themselves
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By: Ch r is Costan zo
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Personal financial management (PFM) has a
dual personality these days. On one side are
Quicken-like planning packages that simplify
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budgeting and other financial tasks, but still
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require a certain amount of regular care and
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attention from users. For years—decades even
—this type of “traditional PFM” has attracted
about one in five consumers. “That market is
steady, though its future is dimming,” says Mark
Schwanhausser, director of omni-channel
financial services at San Francisco, Californiabased technology consulting firm Javelin Strategy & Research.
Exploding in number, on the other hand, are web and mobile apps that provide quick
bursts of financial information and activity for people making on-the-go financial
decisions. The apps run the gamut, helping users get rewards, avoid late fees, pay bills, save on
taxes, and a whole lot more, all through the slick interfaces common to today’s mobile devices.
“PFM in the future goes so far beyond what it is today,” Schwanhausser says. “We’ll see PFM
thrust in front of consumers every time they log on.”
Perhaps no company better exhibits PFM’s split personality than D3 Technology Inc. of Omaha,
Nebraska. Founded in 2007, it adds its PFM tool to the online banking software of various
providers, most notably Jack Henry & Associates of Monett, Missouri. More than 220 banks have
signed up for the popular service.
But Chief Executive Officer Mark Vipond is not overly optimistic that the software will move PFM
usage much beyond the long-standing rate of 20 percent, noting that the banks are mostly
deploying PFM as a separate tab from online banking, creating yet another silo to support as well
as a distinct user experience, mostly for “money hawks” who want to dive into their finances. “The
adoption levels mimic those we’ve seen elsewhere,” he notes.
While the company plans to continue supporting PFM as a separate add-on to online banking,
hope for much higher adoption lies in a version of the software D3 has been working on for the
past two and a half years. The new digital platform provides equal support for PFM and online
banking (as well as money movement). Burdensome PFM tasks like budgeting and expense
categorization occur automatically, based on transaction history, right within the online banking
interface. Only half in jest, Vipond said he expected usage to reach 100 percent since the PFM
analytics will take place as a standard part of the online banking experience, without users having
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8/12/2014
Bank Director :: Personal Financial Management Tools Help Customers Help Themselves
to log in elsewhere or do anything to set up the PFM functionality.
Just as important, the integrated platform will give banks access to a single, comprehensive view
of all customer transactions and data, allowing banks to create a personalized, Amazon-like user
experience in which they can predict a user’s cash flow and recommend products and services
accordingly. “This re-establishes the bank as the primary financial services provider, using the
customer’s own data to personalize the experience,’’ Vipond says.
Increasingly, that experience will be far more dynamic than the spreadsheets and
budget trackers of the past. Star Financial Bank of Fort Wayne, Indiana, for example, depicts
expenses in the form of bubble graphs, using software from MoneyDesktop Inc., of Provo, Utah,
deployed as both a mobile app and an integrated part of its online banking product. “It’s incredibly
interactive,” says Kristin Marcuccilli, chief operating officer of the $1.7-billion asset bank.
Since rolling out the service in January 2013, all of Star Financial’s customers have access to the
PFM functionality through online banking, and about 20 percent so far have downloaded it to their
smart phones or tablets. “We’ve had customers tell our bankers that they’ve never cared about
their finances before, but now they’re following their bubbles, and they’ve got it right in their
pocket. The tool makes it much more fun,” says Marcuccilli.
“While PFM in the past put the onus on users to be proactive, PFM in the future will put banks in
the driver’s seat, enabling them to ping customers with recommended actions,” says Wade
Satterfield, the director of digital service systems at Arvest Bank. The $14-billion asset institution,
based in Lowell, Arkansas, is working on a PFM system that it will roll out sometime in 2015.
Like online banking or bill payment, PFM is a service for which banks generally do not
charge. So how do the investments in PFM make sense for a bank’s own budget? For Marcuccilli,
the return comes from increased levels of customer engagement, leading to stronger loyalty and
longevity. Satterfield says banks need to keep up with the digital experiences customers are
getting from other service providers. “We really don’t have a choice.”
Tags: Technology, Personal Financial Management, Innovation, Inspiration
Chris Costanzo is a freelance writer based in Maplewood, New Jersey who writes on technology
and bank management issues.
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