Consumers throughout Europe are crying out for their banks to do more to help them manage their increasingly complex financial landscapes. So says ING – and it backs up its claim with some hard stats that will cause PFM sceptics such as the writer to take notice. Douglas Blakey reports
For what seems like years now, sundry banks around the world have launched personal financial management tools (PFM) and to date, examples of PFM hits have been few and far between.
Go deeper with GlobalData
Consumer enthusiasm – if measured by regular use of said tools – has tended to be disappointing.
Research commissioned by ING suggests, prime facie, that there is however a demand for such a service, if the banks can get the proposition right.
ING’s survey looks at consumer attitudes towards PFM – poll size 12,000 across multiple markets so a pretty decent sample as such surveys go – and the findings bring out one blinding stat.
Fewer than one in 10 bank customers have access to budgeting tools, despite more than 50% wanting them.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData50% really? So says the survey. The best success rate that has come to the attention of the writer is one bank managing to sign around 6% – yes 6% – of its online customers to use its PFM facility.
That either says something about the current PFM tools on offer or the accuracy of the survey -or perhaps the candour of those being surveyed.
The majority of consumers (67%) say that managing money has become much more difficult over the last decade.
No surprise there – one might expect to see such a figure for that question; indeed it would have been no surprise if the figure was a tad higher.
The gist of the survey findings is that the public wants their bank to help them to not make mistakes and mis-spends, through alerting them when they might go overdrawn, if they are overspending or if they are not paying off debt at a fast enough pace.
The research was released just days after ING CEO Ralph Hamers set out a new approach for the bank and commented that all banks would now need to ‘Think Forward’ in a rapidly changing banking landscape and better cater to modern consumers.
Several bank regulators, including the FCA in Britain have also called on financial companies to take a more ethical approach to dealing with customers.
The study also identifies the typical consumer mindset when it comes to finances, outlining what the bank called the ‘Me Generation’ – a consumer that takes responsibility for his or her own financial decisions and sees better outcomes as a result.
Such consumers (making up 73% of those surveyed) who ultimately make their own financial decisions are more likely to avoid debt (20% overdrawn vs. 30%), and less likely to argue about money (16% vs. 25%).
Other findings includes:
– 42% of consumers wanted to receive an alert if not paying off debt as quickly as planned (compared with 5% of customers who have access to such a service);
– 41% want a tool to set specific savings goals (against 5% who have access);
– 40% want graphics to show progress towards specific savings goals (again only 5% have access meantime to this facility)
– 39% want graphics to show how quickly debit is being paid back (again 5% have this currently)
– 35% want to receive tips, e-mails and videos about managing money (5%….again);
– 34% want automatic categorising of spend on clothes, meals out and other costs (against 8% who have this facility at present), and
– 25% want comparisons to show how their spending compares to similar types of people (whatever that means – apparently 3% of those surveyed already have this offering).
So there we have it. Customers want more and better PFM tools.
But and it is a big but, the banks need to do more to optimise customer user experience and offer tools that users will appreciate.
With perfect timing the next Digital Banking Club webinar is entitled:
Personal Financial Management (PFM): a key weapon in banking loyalty wars?
A stellar cast of speakers has been assembled for the webinar on Thursday, April 24, 2014 at 2:00pm BST of:
– Anne Boden, CEO, SocialFinTech, formerly COO, Allied Irish Banks
– Gavin Littlejohn, Founder and CEO, Money Dashboard
– Simon Cadbury, Head of Strategy & Innovation, Intelligent Environments
It is a safe bet that that little line-up will provoke a lively discussion.
