How will banks use data collected from their PFM tools?


mint_whiteIn a recent US Banker article, 10 Big Ideas for 2010, one idea was the adoption of PFM or Personal Financial Management services.  This new type of service was made popular by Quicken and the controversial Mint.com who’s president made a few comments at last year’s SXSW festival that made a few heads turn.

With the growing number of users, banks saw an opportunity to adopt the technology and some of the nations largest banks have  come out with their own toys (Wells Fargo, PNC, Bank of America).

There are two main reasons banks are deciding to provide this service.  First, it’s a convenient service that helps their clients to understand where they’re spending their money.  This also gives them a reason to go online, which is a cost saving initative that banks have been pushing for years, and succeeding I might add.

The second reason is to gain new insight on their clients and to get a better understanding of where they not only spend their money but where they keep it too.  Very valuable information for a bank to have because it now means they can start to send them targeted messages based on their PFM profile.  A marketing directors dream scenario for creating targeted cross selling campaigns – or is it.

Here’s the problem, if banks decide to use this new found information to send traditional targeted advertisements they will  soon learn that this tactic does nothing more then disenfranchise their customer base.  The new breed of consumer does not want to be sold.  A key take away from the past 10 years of consumer behavior.  What they want is information that will help them avoid mistakes and to save or invest money for the future.  They will buy products and services from companies they trust.  And they trust the companies that are there to help answer their questions, not to give them the latest product pitch.

Common customer rant: “Yes, I need a good savings plan, and perhaps that invovles one of your savings accounts, but don’t just try and sell me on how great your rates are.  Sell me by helping me better understand my situation and what the steps are to being financially secure.”

Give them this and you’ll be on your way to cross selling success.