The call for retail banks to reinvent their business models has never been more urgent. On one hand, banks are challenged by shrinking revenues and struggle with achieving operational cost efficiencies. On the other, they must face the rising threat of FinTech startups that are attacking their core businesses, with the likes of Lending Club, Funding Circle, TransferWise and Venmo quickly becoming household names.
Part II of our How-To series. Read Part I here.
The next 20 years will see the world go from 20,000 “analog” banks to no more than several dozen “digital” institutions.
-Francisco González, BBVA Chairman
Personal Financial Management (PFM) solutions have experienced another phenomenal year. Since our last posts on PFM adoption trends and why banks choose PFM, leading banks including Deutsche Bank, Allied Irish Banks, Consors Bank, and Hellobank! continue to join the PFM race.
Though most of us would agree that PFM is the logical next step for an online-banking-enabled institution, bankers themselves are constantly questioning its true value. The same doubt surfaces again and again:
“What is the ROI of PFM? No promises please, show us numbers… prove it that it works”.
This is a valid concern, considering that PFM implementations have produced very mixed results. Some banks have adopted PFM quite successfully. Others experienced results that fell short of their expectations, leading to overall disappointment with the tool.
This uncertainty sparked our quest to gather as much evidence as possible to support or reject the thesis that PFM enables a more robust ROI...
The number of European banks adopting Personal Financial Management (PFM) solutions has more than tripled in the last 4 years. Currently, around 40 leading banks across the continent have deployed PFM.
But why do banks adopt PFM in the first place? What are their true motives and justifications in choosing PFM?
We conducted a study of 15 banks who have adopted the tool, and here’s why they did it: