I have had various discussions with banking executives about whether they should invest in personal financial management (PFM) during the last months. One thing that often hinders the discussion is that people think of  different functionality when discussing it. Some refer to PFM mainly as account aggregation; others think of it as transaction categorization and budgeting tools. Still others think of savings goal tracking or peer comparisons. Discussion like “shall we invest in PFM” are therefore not very constructive.

A framework that Forrester developed nearly a decade ago provides a useful structure to guide a more constructive discussion. Instead of asking whether they should offer PFM, executives should instead ask whether they can help their customers with four main questions:

  1. What do I own? (account aggregation, total financial status)
  2. How am I doing? (transaction categorization, budgeting, savings goal tracking, peer comparisons)
  3. What should I do? (personalized recommendations based on transaction data)
  4. How can I take action? (personalized recommendations that are directly actionable)

If you are a Forrester client and want to read more about our take on PFM from a European perspective, I encourage you to read my latest report about this topic.