The financial world faces the challenge of users demanding to manage their finances in their cell phones (PFM). Easily, quickly and very efficiently.
"Looking back with regard to PFM, the only users who actually used those tools were hardcore. They weren't intuitive or user-friendly. In fact, the potential market for these products was limited and the task was difficult and not much fun." Rick Claypoole, Director of Cadence Bank defines traditional personal financial management programs in this way in the study Why Traditional PFM Is Dead.
By managing their finances on their computer through their bank, the study highlights that users have to face several problems: The information is hidden or barely visible (at the bottom of a tab and limited to a single account). Some of the operations they want to perform involve too much work or are impossible and they have to go to a branch. From an aesthetic standpoint, the websites are hampered by their design.
Users, highlights Dan Makoski, Vice President of Capital One, have “an overwhelming need for technological innovations and imaginative ideas in the world of finance but the commitment of corporations is usually limited to earning money." Many banks and building societies have attempted to provide value to account holders by offering different conventional and personal financial management software. And most of the time these attempts have failed to live up to expectations.
Banks are increasingly focused on the digital industry – the large ones are spending more than $500 million per year on "mobile technology" alone and worldwide "Fintech" investment grew by 201% between 2013 and 2014 – and they are aware that the best way for financial institutions to grow lies in providingtheir account holders with an extraordinary value , empowering them. In America, Accenture notes that 67% of the millennial generation "are interested in their bank providing them with tools and services that help them create and monitor their funds." Forrester Research adds that digital money management is essential “to win the loyalty of younger customers”.
Consumers don't want to have to register on 5 different sites to find out the state of their finances. Celent Research highlights that 75% of account holders assessed being able see all their finances in one mobile app as "highly valuable", even more than transfers, for example. For digital money management to be effective, all a user's accounts – even if they are in different banks – must be displayed in their application.
To reach out to these customers, digital PFM tools must have the following characteristics: - Fully integrated in the digital banking experience- Be able to be added from multiple sources- From cleaning and sorting transactions- Instantly and effortlessly, requiring little or no work for the user- Enriched with an imaginative and pleasing design
Oracle Financial Services notes that "To shine, a bank should not be a mere transactional body, but must look for the boundaries on the services provided. And to stand out they need to become a kind of personal finance guru to their customers; providing advice and guidance via a touchscreen. Why Traditional PFM Is Dead highlights that consumers don't want technology that makes them work. Therefore financial management should analyze historical data and allow users to have all the information at a click of a button. And they want it on their cell phone.
"See it and do it" is the phrase used by Mark Schwanhausser, director of Javelin Strategy & Research to refer to customer needs. They don't want to waste time on the web or dive into complex graphics. They seek concise, clear ideas to track their bonds and take action quickly. They want advice but without hassle and without wasting a minute of time.
PFMs are coming though banks and financial management platforms still have a long road ahead. In the US, 82% of consumers state they currently control their finances in some way. However, 54% of consumers only do it through pencil and paper or through their own memory. Reaching out to them technologically is the financial industry's challenge.