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Discussions over the years about whether banks can exist without a Personal Finance Manager have finally come to a conclusion. Today it is clear that PFM is essential. Its application, on the other hand, is changing – it has now become just a tool for understanding data and the world of finance, and is no longer a separate information system. According to the title of the Celent report „PFM Is Dead, Long Live PFE”, PFM died in its former form, and remains a background tool hidden from users. Now PFE, or Personal Finance Experience, is used to provide information to clients.
The PFE Era has Arrived
PFE is based on a completely new approach to presenting banking information to users – from a full PFM analysis, it uses only practical conclusions related to the current needs of the client. This solution is closer to advice from family or friends, or useful notifications sent by applications on a smartphone: PFE communicates only single events in important situations requiring action. It is characterized by full personalization, simplicity, accessibility and understandable language of communication, without boring labels and complex visuals.
The Future of Personal Finance Experience
The introduction of PFE is the beginning of a revolution in relations between the bank and its clients. The insights that flow from it will primarily build new value for users, intrinsically bonding them with the bank. Along with the development of artificial intelligence algorithms, more and more sophisticated ways will emerge that will pre-empt their clients’ behavior and support them in everyday life. There will be ideas for dynamic adjustment of the bank’s communication to key moments in the life of the user, providing summaries after international trips, gift expenses, car running costs since the last refueling or a summary of taxi expenses.
The benefits of using PFE are huge – from predictive opportunities to strong personalization and one-to-one communication on both financial and non-financial needs. On this basis, banks are beginning to create different communication strategies with the customer, aimed at improving his or her finances.
In the near future, banks must also finally start fully using – and monetizing – their data. A study conducted by Huy Nguyen showed that financial institutions are still far behind Google and Facebook in this area. Although PFM has already enabled banks to understand clients’ financial lives, PFE has the chance to translate the use of data into real value for its customers.