New Personal Finance Management’s “View + Do” Model is a Win-Win

Dec 1, 2011

New Personal Finance Management’s “View + Do” Model is a Win-Win


Javelin’s 2011 Personal Finance Management Report Introduces a Revolutionary PFM Model that Boosts Both Bank Profitability and Consumer Confidence with Money Management

San Francisco, CA, December 2, 2011 – Javelin Strategy & Research’s latest report radically redefines Personal Finance Management (PFM) for both financial institutions (FIs) and consumers. Consumers seek PFM solutions to monitor and manage their money more effectively from multiple accounts and multiple FIs. Javelin’s report guides FIs on how to provide consumers with a “view + do” PFM model right from the moment they log into their online accounts-not from a tab. This one-stop view offers aggregation of outside accounts, easily view and pay all bills, and categorize spending.

More than 14% of consumers - and 17% of the profitable Gen Y segment - are not managing or monitoring their finances. This creates a ripple effect of problems not only for those consumers, but also for the FIs that service them. Consumers’ lack of financial awareness translates into customers that incur penalties and fees and creates risky lending prospects for FIs. Javelin also found that while consumers do have concerns about security, privacy, and information clutter around PFM, consumer needs for practicality, effectiveness, and convenience trump these concerns.

“In response to the Durbin Amendment, banks alienated consumers by proposing to charge debit card fees, reduce rewards programs, and eliminate free checking,” said Mark Schwanhausser, Senior Analyst, Multichannel Financial Services at Javelin. “If done right, PFM gives FIs the opportunity to reposition themselves as the consumers’ ally by giving consumers greater control over their finances, helping them save time, and enabling them to access all their account information in one safe, secure place.”

In the Personal Finance Management 2011 report, Javelin asked more than 2,300 consumers to evaluate a concept of “one-stop online banking” that would enable them to monitor all their financial accounts in one place, pay bills, analyze their spending, transfer funds, and initiate person-to-person payments from a single starting page.  The results found that FIs are in the best position to provide the PFM model that consumers want. Almost 50% of consumers already primarily manage their finances by logging online to FIs’ sites to check their account balances.  FIs can redefine PFM for a mass-market audience, placing it front and center on their websites, rather than hiding it away in a tab.  FIs can extend PFM to smartphones and tablets to provide greater always-on access and real-time financial information to the growing number of consumers that demand this type of control.

“PFM is one way banks can attract and retain customers and build customer loyalty, which contributes greatly to an FI’s profitability” said James Van Dyke, President, Javelin. “Our 2011 Personal Finance Management report provides step-by-step recommendations on how FIs can implement PFM that is safe, accessible and effective.”

For additional details about Javelin’s “Personal Finance Management 2011: How PFM Can Set the Stage for One-Stop Online Banking and Define Mobile Banking” report.  Clients of Javelin’s subscription service can download the report HERE.

Related Javelin Research:
• Ninth Annual Online Banking and Bill Pay Forecast: Megabanks Dominate Moneyhawks™ While Paperless
Adoption and Online Bill Pay Stall


• Gen Y: How to Engage and Service the New Mobile Generation

Personal Finance Management (Part 1): What Consumers Really Want from PFM

• 2010 Personal Financial Management Competitive Analysis (Part 2): How 10 Top PFM Vendors Are
Redesigning Online Banking

 

About Javelin Strategy & Research:
Javelin Strategy & Research is the leading provider of quantitative and qualitative research focused on the global financial services industry. Our extensive quantitative data and deep analyst experience enable us to forecast the direction of the financial services market and make recommendations that empower you and your business to succeed.

Media Contact
Nancy Ozawa
Marketing Communications
(925) 219-0116
nozawa@javelinstrategy.com
www.javelinstrategy.com/research