While personal financial management (PFM) may be THE most important feature of online/mobile banking going forward, it’s time to stop thinking of it as "product."

PFM is part of every thing you do when communicating account info to customers. The paper statement is a PFM tool. The call center offers PFM. Even the branch helps certain customers with their financial management.

But those old-school tools have limitations. They are expensive, difficult to customize, and aren’t always timely or available.

So online banking has been a boon to personal financial management. Can you imagine going back to the world where you actually had to keep track of your balance in your check register?   

But 17 years after Wells Fargo put the first customer statement online, most customers are still stuck looking at an online rendering of their circa-1960 paper statement. It’s an area ripe for disruption, and Mint.com, with 3% to 4% penetration of U.S. households, proved that users want better-looking, more functional online info.

However, unlike record stores, newspapers, and travel agents, incumbent banks and credit unions have a much better chance to stay relevant and hold on to their market share. Other than early-adopter types, few customers will entrust their money to Internet-based startups (Bank Simple may be poised to prove me wrong, we’ll see). And even if consumers have the desire, it’s often too much of a hassle to make the switch. 

As long as financial institutions stay up-to-date in online/mobile delivery, keep prices in check, and provide decent service, there are no compelling reason for customers to ever leave.

For banks, a big part of staying current is helping customers stay apprised of their financial situation, and helping them improve it. We are lumping those things together and calling it PFM. One of the biggest changes coming, thanks in part to Bank Simple making it central to their UI, is the forward-looking "balance forecast" (or Safe-to-Spend balance in Simple-speak). See last Friday’s post for more on that.

But that’s just the tip of the PFM iceberg. There are dozens of needed new features to bring online banking up to 2012 "web standards." 

In our new 54-page report we cover:

• 23 primary PFM functions
• 40 promising PFM features
• Another 100 potential features
• PFM forecast (U.S. household usage by PFM type)
• The business case
• Putting it all together in multiple service bundles, including fee-based premium options
• PFM availability at the 30 largest U.S. banks and credit unions including our first look at Citibank’s Financial Tools
• Mobile PFM
• PFM for couples

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About the report
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Personal Financial Management 4.0 (link)
Moving forward with the most misunderstood financial
service of the online era

Author: Jim Bruene, Editor & Founder

Published: 25 June 2012

Length: 56 pages, 12 tables, 16,000 words

Cost: No extra charge to OBR subscribers, US$495 for others here

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Sample screenshot
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HelloWallet combines budget status (e.g., at "coffee shops") and a macro "left to spend" balance on its mobile view