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Banks don’t need Big Data … just PFM

I had a revelation when being shown a presentation from one of the Personal Financial Management  (PFM) solutions firms yesterday.

It was when we were talking about how consumers use PFM for peer comparison purposes.  If you’re unfamiliar with such stuff, it’s the ability to see how you stack up against similar people to yourself, in terms of how you spend, save and live with money.

You might ask: what do people of my age typically spend their money on? and find that most of them are drinking vodka or something like that.

But you can do more complex analysis through PFM solutions, such as asking: someone earning my income, living in my area of London, with two kids and a dog, what sort of retirement planning profile do they have on average, and how does my investment in pensions compare?

Now you get the idea.


You can get into some really complex stuff.

And it’s all simply at a point and click.

This sort of user profiling sounds useful for the customer, but the revelation for me is that it even more powerful for the bank.

This is because your customers are sorting out all their transactions, signing up for budgeting and alerts and building their own demographic parameters but, as they do this, the bank can build really powerful marketing campaigns using the same date.

Send a campaign to all people earning this level of income in this area of London who have asked about pensions, a pension’s promotion offer next time they log on.

If you have any 25-34 year olds who have clicked on short term loans, give them an ad for a five-year term loan at 1% below usual rates next time they are online.

Identify all people with two kids in this income bracket and offer them a child protection bond …

You get the idea.

In fact, what’s really classy about this is that the bank doesn’t even have to drill big data to get this sort of campaign to work – the customer does all the work.

All the bank needs to do is to be intelligent enough to leverage the customer’s efforts.

Just a thought …


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Chris Skinner

    @Serge (and slightly answering Robin)
    I hear what you say, but the question is what don’t they want? A great online user experience or a complex, chunky and potentially threatening and insecure aggregation service.
    The latter is what we played with in 1999; the former is what’s on offer today.
    Looking at the latest PFM services – many of which wrap around Yodlee – we see the facebooks and twitters of banking.
    These Web 2.0 service-based offers are what many, even the non-geeks, will seek. Meantime, I appreciate your commentary but think it’s a little like those who thought no-one needed twitter or facebook.
    Once people realise how PFM transforms their online financial experience they’ll move.
    p.s. if PFM is so flaky, how come Mint succeeded?