How Banks Are Driving The Evolution Of Personal Financial Management

 Sarah Kocianski photo
Sarah Kocianski Head of Competitor Strategy
5min read

In the last few weeks Wells Fargo’s Control Tower, a set of tools designed to give customers better oversight over their financial lives, has been made available to all digital customers.

Australian bank ANZ also announced it would start offering its customers nudges to help them build better financial habits. Monzo, a UK-based digital bank offering current accounts with in-depth spending analysis and advanced budgeting tools, raised £85 million ($111.6 million) at a valuation of £1 billion ($1.31 billion).

This suggests personal financial management (PFM) tools and features are still in vogue. Based on the principle of offering customers financial nirvana, these products and services have been around for years. Mint, one of the first players in this space, is now over 10 years old, and whether as stand alone apps, embedded in digital banking, or as features piggy-backing off messaging services, PFM is everywhere and proliferating.


That’s a very good question. Historically PFM tools have had low customer adoption, which can be put down to any number of factors including poor functionality, difficulty of use and irrelevance to customers’ everyday lives. That has meant lack of commercial viability and subsequent acquisition or disappearance. Those launching services today, however, believe they can change this situation thanks to a combination of more modern technologies, changing customer behaviours and broader economic developments.

Smartphones, the influence of customer experience-centric technology giants, and the internet are so widespread that the human desire for instant answers has become a reality in nearly every aspect of life. The willingness to trust non-human interactions and advice has sky-rocketed. And the downturn in economies across the globe, especially after a period of relative plenty in the West, and the consequences of that, have to some extent returned consumer focus to proper management of income and expenditure. These factors make PFM tool adoption more likely, but by no means guarantee success.

Don’t discount the banks

Companies offering stand-alone products continue to display ingenuity, excellent design and user-centricity and the ability to launch features at a rate of knots. But the banks are finally starting to cotton onto how to help customers manage their money digitally, in a practical way. Some have offered PFM tools for years, but they had the same issues and possibly even lower levels of usage as independent products and services. Now they are rethinking their approach.

Starting with Simple, the neobanks realised that money management needed to be a core part of their proposition if they wanted to stand out from the crowd. Whether it’s helping you track what you spend and set budgets, highlighting upcoming outgoings and predicting whether you will have more month than money, or offering an overview of your entire financial position, these tools help customer perceptions that the bank is on their side. In turn, that can help with (but by no means solve) problems of low customer brand loyalty.

Some of the larger, older banks have been watching and learning. BBVA is one of the leaders when it comes to offering its customers insight into their finances. It’s also taking advantage of open banking to connect to customers’ other financial accounts and provide them with a more holistic picture.

The future is here

Offering digital tools which help customers manage their money is heading towards being a hygiene factor for banks. The question is, how do they ensure they are delivering services that are actually useful for customers? Some will buy startups with market leading services, others will partner or use white label services and a few will manage to build their own. But it will take time for many banks to get there, and in the meantime we shouldn’t write off some of the independent products as they continue to deliver financial nirvana to their users.

The evolution of PFM as an optional extra into digital money management sitting at the heart of financial services and products is well underway and that’s a good thing. Good for consumers, good for businesses and good for providers if they want to hold onto customers in a rapidly changing financial services landscape.

This article first appeared on