SPRINGFIELD, MO.-As more credit union members seek ease-of-use control over multifaceted banking transactions, more credit unions are enhancing personal finance management (PFM) tools.
But simply upgrading banking technologies is not a cure-all remedy to meeting consumer demand.
"PFM came along with our online banking upgrade," noted Paul Ebisch, CEO of Assemblies of God Credit Union in Springfield, Mo. "The problem is that it merely pulled together much of one's financial picture rather than being more interactive to get them on a good financial course. I am not as worried about those who already have things together financially, because those individuals will always find a way to keep up with where they are. I wanted something that went past that to help those who may be struggling."
Due to the complexity of managing multiple financial accounts through an array of channels-online, mobile, virtual teller, call centers-a growing number of financial consumers are overwhelmed and do not feel in control of their financial future. According to a Javelin Research and Study report, "Personal Finance Management: Five Things FIs Need to do in 2011," approximately 19% of consumers surveyed said they do not monitor or manage their personal finances, a figure that more than doubled from 8% who indicated the same in 2009.
Additionally, the report noted a decline from 46% to 59% was realized for those consumers who "sometimes" manage finances by logging onto their financial institution's websites to check account balances.
As the scenario often is with technology, a product or service fails to meet expectations. This was the case for AGCU as its first PFM vendor didn't hit the mark. After viewing a more "robust" offering from MoneyDesktop during a recent conference, Ebisch explained he abandoned his vendor contract and quickly signed with MoneyDesktop expecting an early September launch.
"Breaking the contract is the cost of doing business," said Ebisch. "We realized that our current PFM did not work on many mobile devices, and a large number of our online banking members use smart phones or tablets so it didn't make sense to have a PFM that didn't include the devices our members use."
In June, the Provo,Utah-based MoneyDesktop, which develops personal finance technologies and debt management solutions, announced 17 new credit union clients including AGCU, Dave Jaynes, president of the Provo, Utah-based MoneyDesktop said via e-mail.
"Mobile and financial technologies are advancing so quickly that you can actually see consumers changing the way they interact with and manage their finances," said Jaynes. "Assemblies of God Credit Union and other community credit unions that continually exceed member expectations by offering products like PFM will receive major dividends long into the future."
An Intuitive Approach
With more than16,000 members across the globe, Ebisch explained that the "pain point" for many members is the often-asked question: How can I pay down my debt?
"PFM is intuitive; it's not a snowball approach, and it helps members get past their debt," he said.
The benefits of adopting a PFM platform are further supported in Javelin's report. For example, 75% of respondents with a credit card cited that the line of credit was secured from a different financial institution, not their primary bank or credit union. PFM allows these customers to manage accounts across various financial institutions. Additionally, Javelin estimates that financial institutions could reduce operating costs by $8.3 billion by "jump-starting" online banking and bill pay capabilities with "improved" PFM tools.
"After being outdated for years on various technological solutions we have been ramping up to get all aspects of our delivery to a place that is equal or surpasses large banks," said Ebisch. "We are not catching up just for status sake, but because these innovations really serve our members."