Ebook: Personal Financial Management (PFM) (English)

EASY, QUICKLY AND VERY EFFICIENTLY ARE THE KEYS OF
PERSONAL MANAGEMENT TOOLS (PFM)
PERSONAL FINANCIAL
MANAGEMENT
01
The takeoff of
personal financial
management
04
Personal finance
management
platforms for cell
phones
FINTECH SERIE BY
02
05
Banking and
personal financial
management tools
INFOGRAPHIC
Financial
management on
the cell phone
innovation edge
03
INTERVIEW
Lupina Iturriaga
(Fintonic)
01
The takeoff of
personal financial
management
The financial world faces the challenge of
users demanding to manage their finances
in their cell phones (PFM). Easily, quickly
and very efficiently ( ).
SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com
Personal Financial
Management (PFM) tools allow
viewing on mobile all
accounts, transfers or
movements to follow the day
to day financial closely.
Make life easier for users to be
consulted in the same
application that displays the
transactions, cards and
accounts at different banks on
the mobile screen.

Although not everything was
as easy as this.
"Looking back with regard to
PFM, the only users who
actually used those tools were
hardcore. They weren't
intuitive or user-friendly. In
fact, the potential market for
these products was limited
and the task was difficult and
not much fun.

Rick Claypoole, Director
of Cadence Bank defines
traditional personal financial
management programs in this
way in the study Why
Traditional PFM Is Dead.
.
By managing their finances on

their computer through their
bank, the study highlights that
users have to face several
problems: The information is
hidden or barely visible (at the
bottom of a tab and limited to
a single account).
Some of the operations they
want to perform involve too
much work or are impossible
and they have to go to a
branch.
From an aesthetic standpoint,

the websites are hampered by
their design ( )
Users, highlights Dan Makoski,

Vice President of Capital One,
have an overwhelming need
for technological innovations
and imaginative ideas in the
world of finance but the
commitment of corporations is
usually limited to earning
money." Many banks and
building societies have
attempted to provide value to
account holders by offering
different conventional and
personal financial management
software. And most of the time
these attempts have failed to
live up to expectations.
Digital Industry
Banks are increasingly focused
on the digital industry the
large ones are spending more
than $500 million per year on
"mobile technology" alone and
worldwide "Fintech" investment
grew by 201% between 2013

and 2014 and they are aware
that the best way for financial
institutions to grow lies
in providing their account
holders with an extraordinary
value , empowering them. In
America, Accenture notes that
67% of the millennial
generation "are interested in
their bank providing them with
tools and services that help
them create and monitor their
funds." Forrester Research adds
that digital money management
is essential to win the loyalty of
younger customers ( ).
PFM Benefits
Consumers don't want to have
to register on 5 different sites to
find out the state of their
finances.
Celent Research highlights that
75% of account holders
assessed being able see all their
finances in one mobile app as
"highly valuable", even more
than transfers, for example.
For digital money management
to be effective, all a user's
accounts even if they are in
different banks must be
displayed in their application.
must have the following

characteristics:
1. Fully integrated in the digital

banking experience.
2. Be able to be added from
multiple sources.
3. From cleaning and sorting
transactions.
4. Instantly and effortlessly,
requiring little or no work for the
user.
5. Enriched with an imaginative
and pleasing design.
To reach out to these

customers, digital PFM tools
Oracle Financial Services notes

that "To shine, a bank should
not be a mere transactional
body, but must look for the
boundaries on the services
provided. And to stand out
they need to become a kind
of personal finance guru to
their customers; providing
advice and guidance via a
touchscreen. Why Traditional
PFM Is Dead highlights that
consumers don't want

technology that makes them
work. Therefore financial
management should analyze
historical data and allow users
to have all the information at a
click of a button. And they
want it on their cell phone.
"See it and do it" is the phrase

used by Mark Schwanhausser,
director of Javelin Strategy &
Research to refer to customer

needs.
They don't want to waste time
on the web or dive into
complex graphics. They seek
concise, clear ideas to track
their bonds and take action
quickly. They want advice but
without hassle and without
wasting a minute of time.
PFMs are coming though banks

and financial management
platforms still have a long road
ahead.
In the US, 82% of consumers
state they currently control
their finances in some way.
However, 54% of consumers
only do it through pencil and
paper or through their own
memory.
Reaching out to them
technologically is the financial
industry's challenge.
SERIE FINTECH OCTUBRE 2015 www.centrodeinnovacionbbva.com
02
The relationship between
banking and personal financial
management tools
PFM tools must prioritize the wishes and needs of the
consumer over and above the bank's own business if
they are to succeed ( ).
When personal financial

management (PFM) began to
weave its way into the
banking sector, both
consumers and the financial
institutions themselves were
skeptical.
The consumers did not
understand them and were
reluctant to trust this new
service, whereas the banks
and credit unions struggled to
find a way of fitting these tools
to their products and making
them attractive to the
consumer.
PFM tools were created with
the aim of presenting

accounts, balances and
financial transactions in the
customer's own language.
The study by BBVA's Financial
Services says that the Personal
Financial Management tools
(PFM) help consumers follow,
classify, remain informed and
manage their personal
finances.
Banking based on PFM
represents the evolution of
traditional online banking, now
that non-banking PFM is
becoming an ever greater
competitive threat for banking
solutions (
).
These tools took some time to

get off the ground, but today
almost all the aspects of
consumers' financial lives have
migrated to the digital
channels.
People look for online PFM
tools so they can stay up to
date in the field of finances.
"What it comes down to is that
people need advice, but they
dont seek advice", says Rita
Sly, managing director of
channels at ATB Financial, a
regional Canadian bank that
launched their PFM Track It
tool from MX, in The Financial
Brand. Rita points out that
when people are familiar with
a branch, it's relatively easy to

link them with a personal
manager.
Where is the key?

Where is the key?
Delivering advice in a way
that naturally fits within
peoples patterns of behavior
thats the sweet spot for all
financial institutions", adds Sly.
"If you dont leverage
technology to make it part of
customers day to day lives,
youre missing an opportunity
to help them.
Rita Sly took only six months
to get 46% of their online
banking clients to adopt their
PFM product.
Nate Gardner, Executive VicePresident of Client Services at

MX, the Fintech firm behind
the ATB's PFM solution, says
the company wanted to start
afresh and reinvent the
category. "We fundamentally
tossed the traditional notion of
PFM into the trash the notion
that says, We have PFM, lets
check the box and move on.
Instead, money management

should be a key part of the
banking experience across all
channels ( ).
Gardners PFM philosophy is
fairly straightforward. He
believes a good PFM solution
should do the heavy lifting for
users make life easier. So the
development team at MX
focused on a critical
component in the consumers
experience: ensuring that user
transactions are automatically
categorized with precise
accuracy. It may sound simple,
but Gardner swears this is the
trick to make customers value
PFM tools. This makes it
unbelievably easy for users to
manage their money.
The key for innovation

Staying one step ahead is an
obsession for ATB in order to
create loyalty among their
customers. "Theres so much
innovation happening in the
marketplace around financial
services, and we need to be
actively seeking out whats on
the horizon" say ATB.
To explore innovations within
the industry and ferret out
disruptive threats facing their
bank, ATB Financial created
the Emerge Group.
This group of experts
investigated everything from
crowdfunding through to
collaborative savings plans as
well as PFM tools. Curiously, it
didn't see this as a threat for
the banks. PFM tools were not
a widespread technology in
Canada at that time, as there
was only one bank in the
country that provided the
services, and one other that
just dabbled in the market.
They saw a gap and went for
it: "Were here to make banking
better for people and make
their lives richer, and this was
the tool we needed in order to
do that", concludes Sly.
BBVA's study highlights that:
PFM can potentially transform
the consumer experience,

provided they are motivated
by the wishes and needs of the
consumer rather than by the
priorities of the banking
business. People want to learn
to manage their lives better,
not their finances. And
another tip for success is
Adding social capacities by
identifying social sites that are
important for the consumers
(not only the ones the bank
decides to sponsor).
More than just a financial tool,
if personal financial
management is be successful it
must take account of the
customer's psychology.
03
/INTERVIEW
We don't want to compete with
banks, our aim is to to organize
home economics
Lupina Iturriaga is the founder and general manager of
Fintonic ( ), which designed the personal finance
management (PFM) app.
How would you define

Fintonic?
It's a mobile app that displays
the transactions with your
banks and cards on the
screen. Everything is
organized by category: how
much you spend in
supermarkets, restaurants,
cell phone, gas, children
The user doesn't have to do a
thing in all this automatic
organization. With the app
you can view all the bank
statements and balance the
accounts. The process is very
simple. The app tells you if a
bank is charging you more
than others, if you have an
overdraft, if your insurance is
about to expire, if there are
erroneous or duplicate
charges... It tells you all this

with over 50 alerts ( ).
What's the most important
thing for the user?
We think that the most
important thing for the user is
knowing where the money is.
Eight out of ten families don't
know where the money goes
and this alert system enables
them to receive all the
information transparently,
irrespective of the bank. It's
very important for the users
to have information, so they
can use it to make the best
decisions about financial
products and other services.
Does the app use the user's

entire history?
No, when you begin it goes
back 12 months, which is the
information usually provided
by the bank. Once you're a
user, you have your history
saved forever. Through the
search engine you can look
up, for example, how much
you spent at Christmas three
years ago. It enables more
flexible management of your
home economics, of your
day-to-day.
Is this system aimed preferably

at the millennials?
No, it's aimed at all those who
use online banking. There are
older people who are
interested, there's all kinds,
even people aged 70.
Is there some apprehension in

using this kind of tools?
We have more than 350,000
users. At the beginning there
was some apprehension, but
now there's a great deal of
trust. In the United States,
over 20 million people use
these tools. It helps you in
your day-today. Being so
useful, and thanks to word of
mouth and how much you can
save, the initial distrust has
disappeared. Users want to
optimize their money better.
Are they a threat to online

banking?
No. We have nothing to do.
We're not a bank and we have
no balance sheet. We're
complementary. At the bank,
the user makes transfers or
applies for a mortgage loan.
With Fintonic, the user is
going to see this information
organized, with very good
usability. Apart from the
organization, the users will
also receive recommendations
with possible alternatives. Or
the app will tell you which
bank charges more

commissions. It's a
complementary service.
You don't stop having a bank,
in fact, to us the bank is the
customer. We offer the bank's
services, we tell Fintonic
customers whether there is an
interesting account for those
who fit the profile for that
account. We're a platform that
wants to offer users the
possibility to make the most
of their financial products and
other services.
Will banks use these platforms?

I think we will all evolve
towards what the user wants.
The banks and ourselves.
Customers want to have easier
access to their products and
be able to buy services flexibly,
and they want to do
everything using their cell
phones.
What are your users most
interested in?
No two users are alike. Some
pay more attention to the
alerts, others to the budgets...
Users ask us for many things,
but no one in particular.
Sometimes they ask for a
feature to export data to Excel
and when we ask them what
they need it for, we develop it

and try to go one step further.
Fintonic will soon have nothing
to do with the current app, the
look and feel will change
completely ( ).
Our work is to make sure that
all the information is
understandable and users can
understand their home
economics. That's our focus.
A bank has more focuses:

balance sheet, products,
collections... We have a
different goal: to present the
information in a very simple
way and give the best possible
recommendations and alerts.
04
Personal finance management

platforms for cell phones
A browse through some the personal finance management (PFM) programs now on the market (
).
There are mobile applications

to support users in practically
every aspect of life; in leisure,
health and more. So it is no
surprise that such technology
has been used to support
personal finance, by migrating
accounts and investments to
mobile devices.
Personal finance management
(PFM) apps give clients control
over all accounts and positions
via a single website or
application.
A quick tour of just a few of
them:
Mint
Mint compiles a user's bank
accounts into a single
platform. The platform
displays all of their money and
how it is moved. Mint is
capable of synchronizing all
bank accounts, credit cards
and debit cards.
It gives users control over

credit card movements,
expenditure, cash, income
and total assets over time.
The application features
reminders to pay outstanding
bills and tips on how best to
save.
A group of consultants is also

on hand to support users and
help them achieve their
financial goals, such as paying
off debts, creating budgets,
making purchases, etc. It can
also automatically sort items
into categories. For example,
when you make a payment at
a restaurant the expense is
automatically classified under
food. The aggregate account
data can be displayed in
graphs and tables to provide a
clearer view of a user's
financial situation.
This is one of the pioneering
applications in the field, as
well as one of the most
downloaded. It is free and
works with iOS and Android.
Yodlee
In August the financial
solutions firm Envestnet
bought the technology and
financial company Yodlee for
590 million dollars. Yodlee,
founded in 1999 and the
leading company in the
United States, is able to
extract and classify account
transactions and work with

more than 12,000 different
sources. The cloud platform
allows users to view their
credit card movements, bank
accounts and investments via
a single site. The company
offers its services to more
than 850 companies, among
them 11 of the 20 largest

banks in the United States
and hundreds of Internet
services companies. Its
technology has been at the
hub of the leading personal
finance management (PFM)
platforms for a long time ( ).
MoneyWiz
Payment application. This
application allows users to
configure accounts and set up
reminders to pay bills. It is
available for multiple
platforms and devices.
Income and expenses can be
managed via a cloud system,
SYNCbits, which supports
local data storage to allow
access even offline. Data is
synchronized instantly,
automatically and securely. It
supports the import of CSV,
QIF, OFX, QFX and MT940
files.
The application can also be

connected to bank accounts
or PayPal to ensure that all
transaction data is
automatically imported to the
personal manager.
Transfers cannot be made via
the application, meaning
users cannot do anything with
their money except view and
evaluate movements. It does
support operations in any
currency, with a simultaneous
conversion tool for all items (
).
Fintonic
Provides full information on all
of a user's bank accounts in a
single display.
Income and expenses can be
organized and alerts set up for
movements, overdrafts or fee
charges.
Fintonic can compare a user's
expenses and is able to
provide useful information,
such as informing you of an
insurance policy that is
cheaper than the one you just
paid for.
It aggregates and displays
data to anticipate costs, thus
helping to control household
finances.
05/INFOGRAPHIC
Financial management
on the cell phone
Users want to manage their personal finances on the cell
phone easily, quickly and very efficiently.
Share on Pinterest
Financial management
on the cell phone
Fully integrated with the banking
digital experience.
Enables users to add from multiple
sources or check bank accounts.
Transaction clarity and classification.
Instant and effortless, requires little or
no work by the user.
Imaginative and pleasant design.
APP use
Account balance, activity,
transfer, bill payment
100%
92%
Mortgage view
78%
Services
73%
Alerts
57%
P2P money
Balances
Budget tool
Cash refunds
19%
16%
8%
PFM tool consumer age
46%
36%
35%
21%
>50 years
40-49
30-39
<30
PFM tool use

19%
Software
11.2%
Internet
9.5%
Bank
2.9%
All three
Software and bank
2.6%
Software & Internet
2.1%
Bank & Internet
1.8%
49
67%
million
of millennials
Americans
are interested
use PFM apps
in these tools
share
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EASY, QUICKLY AND VERY EFFICIENTLY ARE THE KEYS OF

PERSONAL MANAGEMENT TOOLS (PFM)

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

the mobile screen.

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

not much fun.

By managing their finances on

From an aesthetic standpoint,

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Users, highlights Dan Makoski,

grew by 201% between 2013

must have the following

1. Fully integrated in the digital

To reach out to these

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Oracle Financial Services notes

consumers don't want

"See it and do it" is the phrase

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Research to refer to customer

PFMs are coming though banks

SERIE FINTECH OCTUBRE 2015 www.centrodeinnovacionbbva.com

When personal financial

the aim of presenting

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

These tools took some time to

a branch, it's relatively easy to

Where is the key?

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Nate Gardner, Executive VicePresident of Client Services at

Instead, money management

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

The key for innovation

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

the consumer experience,

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

How would you define

charges... It tells you all this

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Does the app use the user's

Is this system aimed preferably

Is there some apprehension in

Are they a threat to online

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

bank charges more

Will banks use these platforms?

they need it for, we develop it

A bank has more focuses:

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

Personal finance management

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

There are mobile applications

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

It gives users control over

A group of consultants is also

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

transactions and work with

SERIE FINTECH OCTOBER 2015 www.centrodeinnovacionbbva.com

them 11 of the 20 largest

The application can also be