Personal financial management tools represent a win-win situation for banks and their customers. But they also present a potential threat to banks. By creating a better user experience for customers and allowing banks to get a good picture of their customers, PFM solutions can benefit both banks and customers.
But if banks don’t take full advantage of this opportunity, then they’re giving third-party websites a chance to disintermediate them, says Mark Halverson, global executive partner of the wealth and asset management practice at New York-based Accenture.
“If banks don’t create regular daily PFM interactions with their customer base, then they can be pretty sure that customers are having these interactions someplace else,” he asserts. “Whether it’s Quicken or Mint, if people decide that’s the brand and that’s where they go to gather the information they care about, they may not have a high degree of need to interact with the financial institution.”
Bank of Internet USA, a web-based institution with headquarters in San Diego and about $2 billion in assets, began offering Intuit’s FinanceWorks in December 2010 and is now seeing about 15 percent adoption, according to Adriaan van Zyl, the bank’s EVP and COO.
“We are averaging about 12 percent growth every month,” he says. “At this rate, we anticipate the user base will double in the next six months or so.”
As financial institutions plan for upgrades to their online and mobile banking applications, PFM will be at the top of the list for many organizations. The ability to integrate personal savings and investment goals with daily transactions will be well-received by many customers, and create a high degree of loyalty.
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