Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

PERSONAL FINANCE MANAGEMENT DISRUPTORS: Here's what banks can learn from innovative providers reaping ROI from personal finance management tools

This report explores what defines the cutting edge of PFM today, and what banks can learn from innovative providers to boost their own offerings.

Personal finance management (PFM) tools can allow banks to create highly personalized customer experiences and, in turn, drive revenue and retention.

The diversity of today's PFM market illustrates the value that a wide range of providers see in developing such offerings, but its promise — PFM was lauded as the future of banking for over a decade — has long failed to materialize for most incumbent banks as well as consumers. PFM user share plateaued at between 10% and 12% as of 2017, the most recently available data, per Celent.

This plateau is the result of several design flaws that made earlier iterations of PFM tools unengaging. These include only showing users their financial data without providing actionable insights, personalized financial advice, or tools to manage their finances more easily; poor user experience (UX) due to many banks' PFM functionalities being confined to separate tabs to better track engagement metrics; and limited data sharing before open banking regulations (in some jurisdictions), making personalization difficult to achieve due to incomplete financial data for each user.

Today's most sophisticated PFM features, however, can give users maximal control of their finances while requiring little effort on users' end through advances in AI, smart analytics, automation, and regulations like open banking. A new breed of PFM providers is drawing on these developments to roll out features that are more insightful, accurate, and predictive than before, making them a powerful tool for getting consumers to engage with their finances in a meaningful way. Customers are responding to this upgraded version of PFM, and banks need to pay attention or they'll risk eroding customer engagement and loyalty. As customers engage with their finances more meaningfully, banks can translate this increased engagement into more revenue.

In the Personal Finance Management Disruptors report, Insider Intelligence gives an overview of the major categories of players shaping the PFM market today. We continue by outlining some best practices for banks looking to upgrade their PFM offerings, based on exclusive interviews conducted with seven leading PFM providers. We then present the PFM Digital Maturity Model to show banks and other providers the standards they should be aiming for as they build new PFM features to satisfy customers. We continue by making the case for why banks should reinvest in PFM, and why they can't afford not to. Then, we examine eight sophisticated PFM features we believe are bringing significant value to customers and banks today, enriched through our interviews with the companies providing them.

The companies mentioned in this report include: Cleo AI, Greenlight, Meniga, Minna Technologies, N26, Personal Capital, Personetics, and Strands.

Here are some of the key takeaways from the report:

*  PFM tools allow financial services providers to create highly personalized customer experiences and drive revenue and retention in turn — but banks are falling short of customers' expectations. Consumers are more dissatisfied with their banks' PFM services than with any other type of services they provide, and more than 40% of those surveyed stated that they find PFM services from nonbank providers more useful and helpful, per Oracle.

*  There's ample demand for bank-provided PFM tools, however, suggesting that banks should revisit in PFM tools as an essential value proposition. Over 75% of respondents to an RFi survey cited by The Financial Brand said they would prefer to use PFM tools from their primary financial services provider (typically a bank). This compares with just 6% who said they'd prefer PFM tools from fintechs or neobanks.

*  The more that banks can employ highly mature PFM tools, the better they will be able to capture the significant opportunity presented. They can specifically gain ROI on their PFM investments in two key areas:
     *  Customer retention: 71% of Gen Zers believe brands should "help them achieve personal goals and aspirations," per PSFK data, so incorporating personalized insights and advice into banks' PFM products would create substantial customer value.
     *  Increased customer lifetime value: On average, bank customers who make use of PFM tools are 18% wealthier than those who don't, per Javelin Research data cited by MX, and they tend to own every major financial product, such as mortgages and car loans, all of which are key bank revenue sources.

In full, the report:

*  Provides best practices for banks looking to upgrade their PFM offerings to bring more value to their customers.

*  Gives an overview of the main types of companies shaping the cutting edge of PFM in today's crowded market.

*  Presents the PFM Digital Maturity Model to help banks understand what separates mature from basic PFM features.

*  Explains why reinvesting in PFM is imperative for banks, and what they stand to gain from doing so.

*  Examines winning strategies for implementing sophisticated PFM features, based on exclusive interviews.


AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×