personal finance management (pfm) is the future of online banking
DESCRIPTION
More and more US and European banks are offering PFM solutions in their online banks to strengthen the relationships with their customers and compete with independent PFM web sites such as Mint.com. Customers love PFM but what's in it for the banks? Georg Ludviksson , CEO of Meniga describes the experiences of Meniga's partners and other banks of offering PFM solutions through their online banks. Presentation held at the Bank 2.0 conference in Stockholm on November 16th 2010. See www.meniga.com and www.bank20.seTRANSCRIPT
![Page 1: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/1.jpg)
Personal Finance Management (PFM) is the future of online banking
Georg LudvikssonMeniga Co-Founder and CEO
![Page 2: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/2.jpg)
“PFM’s critically important, it’s a vision of the future of online banking”
Emmett Higdon, Senior Analyst at Forrester Research
![Page 3: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/3.jpg)
Venture-funded Nordic software company
Born from the Icelandic financial crisis
Focus on PFM Solutions for Retail Banks
Operating PFM with retail banks since 2009
![Page 4: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/4.jpg)
What is PFM?
+• Overview• Budgeting• Financial Planning• Follow-up• Education
• Easy to use• Social networking• Rich Interface• Fun• Visual
Personal Finance Software Web 2.0
= Mass Appeal
![Page 5: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/5.jpg)
The new generation of online PFM started in the USA
![Page 6: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/6.jpg)
Mint.com launched in 2007and now has 4 million users
![Page 7: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/7.jpg)
... but banks are slowly taking over
![Page 8: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/8.jpg)
![Page 9: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/9.jpg)
![Page 10: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/10.jpg)
One in five US banks now offer PFMAite Group: PFM: A platform for customer engagement, February 2010
Over one third of Americans now use online bankingtools to manage their finances
– a 27% increase since 2009According to Intuit Financial Services: http://www.ifs.intuit.com/
60% more people use PFM provided by banks thanindependent PFM web sites
Online Banking Report, May 2010
Consumers are twice as likely to trust a bank over aPFM web start-up (71% vs 35%)
Javelin Strategy report on PFM Tools
![Page 11: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/11.jpg)
Europe had a slower start but is now also picking up steam in PFM
![Page 12: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/12.jpg)
BBVA launched „Tu Cuentas“ in 2008
PFM site separate from online bankingThird of online banking users active
![Page 13: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/13.jpg)
Islandsbanki launched Meniga in 2009
![Page 14: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/14.jpg)
ING launched TIM in 2010
![Page 15: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/15.jpg)
Independent PFM web sites exist in many European markets...
![Page 16: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/16.jpg)
...including Sweden...
![Page 17: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/17.jpg)
... but they have limited tractionbecause transactions have to be manually imported
![Page 18: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/18.jpg)
Only a handful of banks in Europe offer comprehensive PFM to their customers
...but many are in the works...and most are reviewing their
strategies
PFM Consumer awareness is still much lower in Europe than in the USA
Independent PFM sites exist in many European markets but are struggling
![Page 19: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/19.jpg)
Meniga PFM Solution Live Demo
![Page 20: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/20.jpg)
![Page 21: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/21.jpg)
![Page 22: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/22.jpg)
![Page 23: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/23.jpg)
User adoption and feedback from Meniga‘s implementation in Iceland with Íslandsbanki
![Page 24: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/24.jpg)
Íslandsbanki launched an ad campaign
![Page 25: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/25.jpg)
Over 20% of the bank‘s online users signed upwithin 6 months
Over 75% of new users login again within 2weeks
Over 25% of users visit more than 5 times inthe first month and become highly active
Average 12 min and 35 pageviews per visit
Excellent Engagement Metrics
![Page 26: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/26.jpg)
User Age Distribution
Younger than 25 25-34 35-44 45-59 60 and older0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
![Page 27: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/27.jpg)
Equal Gender Split
52% Male 48% Female
![Page 28: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/28.jpg)
“A huge relief to have a good overview of my finances.”
Woman in her 30s
![Page 29: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/29.jpg)
“This is the most user-friendly budgeting tool that I have ever known. Managing my money is really simple and I always have an up-to-date picture of where my money is going. I have improved my spending habits and am therefore able to pay down debt faster.”
Man in his 60s
![Page 30: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/30.jpg)
82% are pleased or very pleased
Mjög ánægð(ur) Frekar ánægð(ur) Hvorki ánægð(ur) né óánægð(ur)
Frekar óánægð(ur) Mjög óánægð(ur)0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Very pleased Pleased Neither pleased nor displeased
Displeased Very displeased
Overall, how pleased or displeased are you with Meniga?
![Page 31: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/31.jpg)
88% say they will regularly use Meniga
How likely or unlikely is it that you will regulary use Meniga in the future?
Mjög líkl
egt
Freka
r líkle
gt
Hvorki
líkleg
t né ó
líkleg
t
Freka
r ólík
legt
Mjög ólík
legt
Ég m
un ekki
nota Men
iga fr
amar.
Ástæða:
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Very likely Likely Neither likely nor unlikely
Unlikely Very unlikely I wont use it again. Reason: “No support for my main credit card”
![Page 32: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/32.jpg)
66% say Meniga has helped them see where they can improve financially
Has Meniga helped you see where you can improve in your household’s finances?
No: 34% Yes: 66%
![Page 33: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/33.jpg)
41% say they have improved their spending behavior because of Meniga
Has your spending behavior improved after you started using Meniga?
No: 59% Yes: 41%
![Page 34: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/34.jpg)
Why should retail banks care about PFM?
![Page 35: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/35.jpg)
“Javelin data illustrates that financial institutions that install compelling personal finance management tools stand to reap the benefits of increased customer loyalty, higher usage, lower costs and added revenue.”
Javelin Strategy & Research, September 2009
![Page 36: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/36.jpg)
PFM strengthens your brand
20-40% of your customers will love PFM
PFM is socially responsible–it‘s the right thing to do
80% of Meniga‘s users (20% of bank‘scustomers) say PFM is an important andvaluable service
Stronger effect for an early-mover
![Page 37: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/37.jpg)
PFM vastly Increases Customer Retention
Some banks have seen a reduction of up to 50%in accounts closed after introducing PFMOnlineBankingReview, July 2010
PFM users build a history they don‘t want to lose
We live in a time where loyalty is on the decline
Customers who use the PFM tools are significantly more profitableOnlineBankingReview, July 2010
![Page 38: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/38.jpg)
72% say Meniga increases their loyalty to their bank
State how much you agree or disagree with the following statement: “My bank offering me free access
To Meniga increases my loyalty to the bank”.
Mjög sammála Sammála Hvorki sammála né ósammála
Ósammála Mjög ósammála0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Strongly agree Agree Neither agree nor disagree
Disagree Strongly disagree
![Page 39: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/39.jpg)
“PFM can be an even more powerful retention technique than other online features, even bill payment. Why? The average user with a dozen or so payees could move their bill payment account to another bank with an hour or two of work. But with current practices, it’s much more difficult, if not impossible, to move transaction history to another bank.”
Javelin Strategy & Research, September 2009
![Page 40: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/40.jpg)
Customer Engagement and Cross-Selling
More and more people prefer never to visit branches
PFM is a major new low-cost channel for engaging withyour customers
PFM usage says a lot about users‘ financial situation and brings unique data to target marketing efforts
PFM is a natural channel for recommending productsand services
![Page 41: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/41.jpg)
PFM helps you Acquire Customers
Stand-alone PFM attracts new customers
PFM can increase the effectiveness of otheracquisition methods, such as credit card offers
PFM users use your credit and debit cards more- 20% of Meniga users have increased use of cards issued by their bank since signing up
![Page 42: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/42.jpg)
89% say they‘d recommend Meniga
How likely or unlikely is it that you will recommend Meniga to your friends?
Mjög líklegt Frekar líklegt Hvorki líklegt né ólíklegt Frekar ólíklegt Mjög ólíklegt0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Very likely Likely Neither likely nor unlikely
Unlikely Very unlikely
![Page 43: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/43.jpg)
PFM increases Efficiency
PFM is a big step towards the „virtual branch“
PFM partly automates the advice customers currently seek in branches.
PFM should be part of a long-term strategy tostay close to your customers
![Page 44: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/44.jpg)
“Personal Finance Management (PFM) functionality is the highest potential ROI project for retail financial institutions to implement in 2010.”
Online Banking Report, May 2010
![Page 45: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/45.jpg)
Offering PFM to your customers is an investment in your bank‘s future...
![Page 46: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/46.jpg)
... but deploying PFM doesn‘t have to be a long and difficult process
![Page 47: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/47.jpg)
Meniga PFM Solution Deployment
Stand-alone web application software
On-premise deployment or SaaS
White-label offering
Flexible and straight-forward integrationoptions for any bank‘s technical platform
![Page 48: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/48.jpg)
Step 1 Step 2
• Re-skin Meniga to match bank‘s branding policy
• Implement back-end integration to allow for secure flow of data (transactions)
Timeframe: Few months
• Gradually increase integration with online bank
• Move towards a seamless user experience
Timeframe: Variable
Stand-alone PFM PFM as part of online bank
![Page 49: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/49.jpg)
![Page 50: Personal Finance Management (PFM) is the future of online banking](https://reader035.vdocuments.us/reader035/viewer/2022081800/554201a5550346cf068b45d4/html5/thumbnails/50.jpg)
Meet us again at FinovateEurope in London on Feb 1st 2011