November 25, 2009
Who or what will fund the next round of PFM?
Personal financial management provider Wesabe has stepped up its efforts to sign on more financial institutions with the launch of a website to support direct sales of its Springboard platform.
Springboard offers a cloud-based services model for financial institutions that want to offer budgeting, account aggregation and widgets to customers, without hosting a platform in-house.
The market for personal financial management appears to be splitting into two groups – direct-to-consumer and bank-driven. Other white label PFM offerings are available from Geezeo, Jwaala and Yodlee. Locally Sandstone Technology and eWise are also working to offer an expanding range of personal financial management tools.
This makes Mint.com (recently bought by Quicken) one of the few remaining direct-to-consumer platforms.
Mint.com founder Aaron Patzer says Mint’s success has been driven by its independence, and in this interview with Online Banking Review, argued while personal financial management tools will continue to be rolled out by banks, independent providers will always have the ability to save consumers more money. “Banks will always be biased. They will always push their own products.”
For now, few banks are offering even limited budgeting and comparison tools. In Australia ANZ offers aggregation via its Yodlee powered MoneyManager site. At last count (in June) it had 30,000 users, a drop in the ocean compared to the millions now banking online.
Wesabe has been offering Springboard since March and so far only counts a handful of credit unions as customers.
Wesabe clearly gets that personal financial management needs to go beyond aggregation, but perhaps the secret to greater uptake lies in integrating these tools across our entire lives – incorporating tax (as Mint.com is doing with TurboTax), and even retirement planning (as Simplifi appears to be doing).
A number of wealth management groups in
It’s something I hope to discuss with Xero founder Rod Drury, ahead of his presentation at next week’s Future of Money conference.
Xero is preparing to enter the PFM space next year with Xero Personal, on the back of successfully delivering small business people the kind of tools they need to take control of their cashflow.
What do you think?
Should PFM be offered by banks, or left to independent providers?
Is tax planning the silver bullet for PFM providers? Could wealth managers successfully use PFM to offer a better service?
Written by: Charis
Filed Under: Retail delivery & distribution, The Better Banking Blog
Tags: ANZ, Geezeo, Jwaala, mint.com, MoneyManager, personal financial management, wesabe, Wesabe Springboard, Xero, Yodlee
Trackback URL: http://www.bankingreview.com.au/2009/11/who-or-what-will-fund-the-next-round-of-pfm.html/trackback
Bryan
November 25, 2009 at 11:33 pm
At this stage the PFM market can sustain consumer direct and FI to consumer business models. Which is better is difficult to ascertain without understanding the PFM providers business strategy and monetization model. Long term, we must consider the findings of a recent Javelin report that states consumers are twice as likely to trust a bank or credit union over a PFM web startup (71% vs. 35%).
PFM in many ways is still being defined by the needs of the market and the competency of the companies offering it. PFM is simply one component of the online banking experience, which is grossly in need of reinvention. Consumers demand ease and convenience and a sense of control over their financial destiny. The FIs that address these needs, while demonstrating genuine advocacy, will be the real winners.
Bryan Clagett
Chief Marketing Officer
Geezeo
nyc
November 26, 2009 at 11:00 am
Don't leave out Intuit's own FI to consumer option – Financeworks – if you are looking at options.
http://www.financeworks.com/
David Mottershead
November 26, 2009 at 11:42 am
It is time the banks started understanding who their customers are and what their customers successful customer outcomes are. What I mean is that banks should no longer be an alternative to the mattress. They should be looking at their service offerings through the eyes of their customers, understanding what their customers REALLY want and delivering the services to make it happen.
Do customers want online banking, bill payment sure? Do customers want online banking customization? Do customers really care if their bank is different? Is this what customers really want? NO.
Ultimately what customers REALLY want is financial success. The bank that is first to embed the motto "We are here to ensure the financial success of our customers" into its culture and act upon this at all levels, from upper management down to customer service staff, WILL be different.
Bryan Link
November 27, 2009 at 12:44 am
Hi Charis-
Great post on the issue of banks/CU's offering PFM-type services to their customers. At SimpliFi, we have–to put it simply–bet our business on the fact that they should and they will! If FI's are serious about growing and sustaining relationships with their online customer base (which is growing in size and wealth/profitability), then they must move beyond offering the same basic set of online transactional services that everyone else has. Online banking is a pure commodity at this point and provides no real way to help customers "connect the dots" between their financial needs/goals and their day-to-day financial actions. This is the real value that PFM tools can bring to FI's and their customers–and why we are so bullish on this concept!
Take care and happy Thanksgiving!
Bryan Link
CEO, SimpliFi
http://www.simplifi.net
stevendeblois
December 3, 2009 at 6:49 am
Hello,
Curious if you can offer greater insight into this section from your latest post…
"A number of wealth management groups in Australia are currently considering how they can integrate PFM tools into the service offered by their financial planners."
Thank you!
Steve
http://www.twitter.com/stevendeblois