Is PFM Really the Answer?
While attending BarCampBankCharleston, I tweeted that “the jury is still out on bank benefits of offering PFM”. The reason for this was because there aren’t a lot of numbers to back up the ROI of offering PFM. I have heard that it can increase the retention for financial institutions. But what is the current online usage for these FIs now? Currently, 40% of our customers are actively using online banking. I’ll let you marinate on that for a moment.
Ok. Now, that wasn’t a typo. We have 40% of our customers active on online banking. 70% of our customers have signed up for the service. Heck, we haven’t even done a really hard push into mobile and we have 1% of our customers signed up after five months. I think it took Bank of America a little over a year to get to that point in mobile banking customers. Also, I believe 20% of FI customers actively using online banking is considered great.
So if we have 40% using online banking, what benefit would PFM bring us? Personally, I think that the current online banking offerings suck when compared to PFM. I’ve used Mint and Wesabe and seen demos for FinanceWorks, Jwaala and Yodlee. Honestly, the experience on any of these is way better than what’s currently offered by online banking vendors. Even Cisco’s Generation Y survey mentioned them wanting PFM type information offered by their banks.
But I’m not sold on adding PFM as another service. What I really want is for my online banking to function more like a PFM. The only things that are really missing from PFM are bill pay and transfers. Digital Insight is in a unique position in that Intuit bought Mint. I’m sure they’ll be phasing out FinanceWorks and switch everyone over to Mint. But why not just turn Mint into their online banking system?
If I worked at a PFM vendor, this would be my biggest fear. Customers want more financial advice and the social aspect that can be obtained from PFM. FIs want the ability to easily market additional and new products. Add in aggregating all your financial information, bill pay and internal/external transfers and you would have a killer online banking experience.
So now we know what the potential of online banking/PFM can be. The question is, who’s going to step up and make it a reality for us first?