Personal finance management (PFM) tools are increasing in popularity as a way to cement member loyalty. According to Callahan's 2009 Technology Survey, almost 30% of credit unions currently offer PFM tools and an additional 40% expect to offer them over the next two years.
Here are six core attributes credit unions should consider when selecting a PFM tool for their members:
1) Security: Vendors vary in how they aggregrate member accounts across financial institutions. Some vendors store member account login information on their server, while others store passwords on the member’s computer. Security measures should be compatible with existing credit union safeguards.
2) Ease of categorizing expenses: PFM tools vary in how they automatically code expenses. Tools with a limited range of retailers require members to invest their own time which can impede adoption and ongoing usage.
3) Targeted marketing opportunities: A critical rationale for launching PFM tools is the ability to better target members with money saving products and services. Be sure your PFM selection has this option.
4) Social networking: Soial networking aspects can increase member involvement; however, the credit union should consider the extent that it can oversee and participate in member forums for education and marketing.
5) Alerts and reminders about spending: Customizable alerts keep members involved.
6) Management reporting options: Member spending data is a powerful tool for developing marketing and educational programs.
Once PFM tools are implemented, ongoing marketing is necessary to encourage both prospective and existing users. After the initial excitement of using the management tools wear-off, members will need reminders to encourage on-going usage.