Personal finance management report


Personal finance management (PFM) tools can enable banks to create highly personalized customer experiences and, in turn, generate revenue and loyalty.

The diversity of today’s PFM market illustrates the value that a wide range of suppliers see in developing such offerings, but its promise – PFM has been hailed as the

future of banking

for over a decade – a long time failed to materialize for most legacy banks as well as for consumers. The share of PFM users peaked between 10% and 12% from 2017, the most recent data available, through Celent.

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This plateau is the result of several design flaws that made previous iterations of PFM tools uninviting. These include showing users their financial data without providing actionable information, personalized financial advice or tools to manage their finances more easily; poor user experience (UX) due to the fact that many banks’ GFP functionality is confined to separate tabs to better track engagement metrics; and limited data sharing before open banking regulations (in some jurisdictions), which makes personalization difficult to achieve due to incomplete financial data for each user.

However, today’s most sophisticated PFM features can give users maximum control over their finances while requiring little user effort thanks to advances in AI, intelligent analytics, automation and regulations such as open banking. A new generation of PFM providers are leveraging these developments to deploy more insightful, precise and predictive features than ever before, making it a powerful tool in getting consumers to engage with their finances in meaningful ways. Customers are reacting to this improved version of PFM, and banks need to pay attention or they risk eroding customer engagement and loyalty. As customers engage with their finances in more meaningful ways, banks can translate that increased engagement into more revenue.

In the Disruptors of personal finance management report, Insider Intelligence provides an overview of the main categories of players shaping the PFM market today. We go on to describe some of the 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 vendors the standards they should aim for when creating new PFM functionality to satisfy customers. We go on to explain why banks should reinvest in PFM and why they cannot afford not to. Next, we take a look at eight sophisticated PFM features that we believe deliver significant value to customers and banks today, enriched by our interviews with the companies that provide them.

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 service providers to create highly personalized customer experiences and in turn generate revenue and loyalty, but banks are failing to meet customer expectations. Consumers are more dissatisfied with their banks’ PFM services than any other type of service they provide, and over 40% of those surveyed said they find PFM services from non-bank providers more useful and useful. , according to Oracle.
  • There is, however, a strong demand for PFM tools provided by banks, which suggests that banks should revisit PFM tools as a core 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 main financial service provider (usually a bank). This compares to just 6% who said they preferred PFM tools from fintechs or neobanks.
  • The more banks can use highly mature PFM tools, the better they will be able to seize the significant opportunity that presents itself. They can specifically achieve a return on their investment in PFM in two key areas:
    • Loyalty of the clientele: 71% of Gen Z believe brands should “help them achieve their personal goals and aspirations,” according to PSFK data.
    • Increased Customer Lifetime Value: On average, customers of banks that use PFM tools are 18% richer than those that don’t, according to data from Javelin Research cited by MX, and they tend to own all major financial products, such as mortgages and auto loans, which are the main sources of income for banks.

In its entirety, the report:

  • Provides best practices for banks looking to upgrade their PFM offerings to bring more value to their customers.
  • Provides an overview of the main types of businesses that are shaping the cutting edge of PFM in today’s crowded marketplace.
  • Introduces the PFM Digital Maturity Model to help banks understand what separates mature PFM functionality from core functionality.
  • Explain 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 proprietary interviews.

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