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Things To Consider Before Launching PFM


Alexander Arabey

Director of Business Development

“… PFM doesn’t work unless you do …”

Being in software development business for many years, I’ve met hundreds of banks and credit unions seeking to keep up with industry trends. For some, they already have remote banking systems with standard features. For others, the competition is gaining intensity. Hardly a week goes by that I don’t meet with bank employees and their big bosses. In these meetings I am often asked all sorts of general questions like, “What is this digital banking fuss all about?” or “What do you have to offer for us?

And indeed, once online and mobile banking systems are up and running, banks often start to wonder where to go next. The situation may be escalated by the big boss who keeps saying that it’s high time their bank got to the top 3 of today’s retail banking industry. Bank employees cling to the three magic letters – PFM. In 90% of cases it resembles a voodoo spell – pronounced with enthusiasm and expectation that personal finance management tools will totally solve all the problems. When I ask them why they need PFM in the first place they say “Well… we’ll know everything about the client… and they will be loyal when they see what a cool thing we’ve made here.” Apparently, PFM can provide tangible benefits, but it also has some restrictions. In this post, I will try to outline the actual capabilities and restrictions of personal finance management systems. Maybe it will have a sobering effect on some of my colleagues from the banking industry.


  • In most cases a PFM app works with the data stored in this particular bank, which means that the client’s deposits and accounts in other banks are not taken on board. This prevents the client from getting the whole picture.
  • PFM systems cannot automatically register cash payments and split them into categories. Cash is still the single most popular method of payment in many countries around the world and is losing ground very slowly.
  • One should not expect clients to regularly enter their cash expenses into the system, and then try to tune or optimize something in the app, because people are lazy by nature, apart from the few vanishing geeks.

This means that accounting, one of the major components of PFM, shows only a part of the client’s expenses and so will be primarily used as a handy visualizing tool. By the way, some bankers think that PFM is all about the pie chart depicting the expenses (food – 30%, petrol – 10% etc.), but without the complete data the pie chart is pie in the sky.



  • When it comes to financial planning, PFM systems offer quite a few interesting tools to play with. Modelers, schedulers and reminders also give the bank a lot more information about the clients, for they reveal their real financial potential, including the money outside the bank, when budgeting.

In practice, the real value that can be extracted from PFM is more accurate information about the client. This information can further be used for better targeting of special offers and campaigns.

To develop a comprehensive PFM system with rich functionality, we carried out a profound business analysis and found that the most effective approach is the combination of the following three modules:

  • Tools for customer involvement – personal finance management module (StandFore PFM). Its functionality includes creating pie-charts of categorized expenses, setting financial goals and saving to reach them, budgeting and more.


  • Tools for customer research – digital marketing module (StandFore DMS). It is used to group customers into segments according to various criteria (including those obtained from PFM, e.g. customers who are saving for real estate purchases), analyze their behaviour in terms of finance management, etc.


  • Sales tools, which are used for targeted promotion of products and services of the bank and its partners. Targeted personal messages, banners and news can be used separately or combined into one massive ad campaign. For cross-selling there’s StandFore Active – a module designed to connect offers from external partners (travel agencies, car dealerships, etc.)

Taken together, these tools enable the realization of end-to-end scenarios, for example: a client sets a goal “Travelling to Maldives, USD 10,000”. PFM calculates the maximum time frame for the attainment of the goal, suggests a savings schedule, etc. In the mean time, the app (StandFore Active + DMS) has come up with several package tour offers from partnering travel agencies and specified that the average price of such tours varies from USD 7,000 to USD 15,000. So, one system does it all: suggests the most suitable tour from one of the partners, inquires about the expected travel dates, works out a possible goal attainment scenario and offers to take out a loan for the missing amount.

A PFM app that really works should not only be an amusing toy for a client, but be a means of selling of this very product to this particular client, in this particular time. You can’t do without dedicated resources and expertise to make it all work.

The launch of PFM must be a conscious decision. Yes, clients might see the new functionality and some of them will even start using it (about 5-7% of clients), but the bigger part of the audience will just skip it. That’s why marketing and retail banking departments need to have a clear understanding of how and what for PFM will be used in their bank, long before introducing it.

PFM doesn’t work unless you do. Or as they say, no bees, no honey.