Credit unions that want to quantify the ROI of personal financial management tools should consider the following benefits:
- PFM helps members improve their finances.
PFM offers members an easier way to budget, track spending, and make progress against set goals. Easy-to-use spending charts and tracking tools automatically categorize spending on debit and credit cards, allowing members to easily see where their money is going. Credit unions can use member spending data to provide offers for money-saving products.
- PFM increases member involvement with the credit union.
PFM is a “sticky” service, similar to bill pay. It requires a time investment for members to add account information and set spending goals. Account alerts are an ongoing reminder of the member-credit union relationship and can include a short message. Features such as group message boards for sharing money-saving ideas create community and increase involvement.
- PFM provides a competitive advantage.
As major banks ramp up advertising based on their new “consumer focus,” they’re hoping people will forget these consumer-oriented changes were federally mandated. Anti-bank sentiment will take time to subside, providing credit unions with opportunities to market their ability to help members improve their financial health. Offering members an easier way to control spending is a message that resonates across all age groups.
- Bring members back from “free” PFM providers.
Many members are already using PFM services provided by non-financial institutions. Providers such as Mint and Wesabe finance their free services through ad revenue and product placement; however, products touted as a way to “save” money can include restrictions and terms that are not beneficial for members.