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Personal Finance Management (PFM) is the future of online banking
Georg LudvikssonMeniga Co-Founder and CEO
“PFM’s critically important, it’s a vision of the future of online banking”
Emmett Higdon, Senior Analyst at Forrester Research
Venture-funded Nordic software company
Born from the Icelandic financial crisis
Focus on PFM Solutions for Retail Banks
Operating PFM with retail banks since 2009
What is PFM?
+• Overview• Budgeting• Financial Planning• Follow-up• Education
• Easy to use• Social networking• Rich Interface• Fun• Visual
Personal Finance Software Web 2.0
= Mass Appeal
The new generation of online PFM started in the USA
Mint.com launched in 2007and now has 4 million users
... but banks are slowly taking over
One in five US banks now offer PFMAite Group: PFM: A platform for customer engagement, February 2010
Over one third of Americans now use online bankingtools to manage their finances
– a 27% increase since 2009According to Intuit Financial Services: http://www.ifs.intuit.com/
60% more people use PFM provided by banks thanindependent PFM web sites
Online Banking Report, May 2010
Consumers are twice as likely to trust a bank over aPFM web start-up (71% vs 35%)
Javelin Strategy report on PFM Tools
Europe had a slower start but is now also picking up steam in PFM
BBVA launched „Tu Cuentas“ in 2008
PFM site separate from online bankingThird of online banking users active
Islandsbanki launched Meniga in 2009
ING launched TIM in 2010
Independent PFM web sites exist in many European markets...
...including Sweden...
... but they have limited tractionbecause transactions have to be manually imported
Only a handful of banks in Europe offer comprehensive PFM to their customers
...but many are in the works...and most are reviewing their
strategies
PFM Consumer awareness is still much lower in Europe than in the USA
Independent PFM sites exist in many European markets but are struggling
Meniga PFM Solution Live Demo
User adoption and feedback from Meniga‘s implementation in Iceland with Íslandsbanki
Íslandsbanki launched an ad campaign
Over 20% of the bank‘s online users signed upwithin 6 months
Over 75% of new users login again within 2weeks
Over 25% of users visit more than 5 times inthe first month and become highly active
Average 12 min and 35 pageviews per visit
Excellent Engagement Metrics
User Age Distribution
Younger than 25 25-34 35-44 45-59 60 and older0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Equal Gender Split
52% Male 48% Female
“A huge relief to have a good overview of my finances.”
Woman in her 30s
“This is the most user-friendly budgeting tool that I have ever known. Managing my money is really simple and I always have an up-to-date picture of where my money is going. I have improved my spending habits and am therefore able to pay down debt faster.”
Man in his 60s
82% are pleased or very pleased
Mjög ánægð(ur) Frekar ánægð(ur) Hvorki ánægð(ur) né óánægð(ur)
Frekar óánægð(ur) Mjög óánægð(ur)0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Very pleased Pleased Neither pleased nor displeased
Displeased Very displeased
Overall, how pleased or displeased are you with Meniga?
88% say they will regularly use Meniga
How likely or unlikely is it that you will regulary use Meniga in the future?
Mjög líkl
egt
Freka
r líkle
gt
Hvorki
líkleg
t né ó
líkleg
t
Freka
r ólík
legt
Mjög ólík
legt
Ég m
un ekki
nota Men
iga fr
amar.
Ástæða:
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Very likely Likely Neither likely nor unlikely
Unlikely Very unlikely I wont use it again. Reason: “No support for my main credit card”
66% say Meniga has helped them see where they can improve financially
Has Meniga helped you see where you can improve in your household’s finances?
No: 34% Yes: 66%
41% say they have improved their spending behavior because of Meniga
Has your spending behavior improved after you started using Meniga?
No: 59% Yes: 41%
Why should retail banks care about PFM?
“Javelin data illustrates that financial institutions that install compelling personal finance management tools stand to reap the benefits of increased customer loyalty, higher usage, lower costs and added revenue.”
Javelin Strategy & Research, September 2009
PFM strengthens your brand
20-40% of your customers will love PFM
PFM is socially responsible–it‘s the right thing to do
80% of Meniga‘s users (20% of bank‘scustomers) say PFM is an important andvaluable service
Stronger effect for an early-mover
PFM vastly Increases Customer Retention
Some banks have seen a reduction of up to 50%in accounts closed after introducing PFMOnlineBankingReview, July 2010
PFM users build a history they don‘t want to lose
We live in a time where loyalty is on the decline
Customers who use the PFM tools are significantly more profitableOnlineBankingReview, July 2010
72% say Meniga increases their loyalty to their bank
State how much you agree or disagree with the following statement: “My bank offering me free access
To Meniga increases my loyalty to the bank”.
Mjög sammála Sammála Hvorki sammála né ósammála
Ósammála Mjög ósammála0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Strongly agree Agree Neither agree nor disagree
Disagree Strongly disagree
“PFM can be an even more powerful retention technique than other online features, even bill payment. Why? The average user with a dozen or so payees could move their bill payment account to another bank with an hour or two of work. But with current practices, it’s much more difficult, if not impossible, to move transaction history to another bank.”
Javelin Strategy & Research, September 2009
Customer Engagement and Cross-Selling
More and more people prefer never to visit branches
PFM is a major new low-cost channel for engaging withyour customers
PFM usage says a lot about users‘ financial situation and brings unique data to target marketing efforts
PFM is a natural channel for recommending productsand services
PFM helps you Acquire Customers
Stand-alone PFM attracts new customers
PFM can increase the effectiveness of otheracquisition methods, such as credit card offers
PFM users use your credit and debit cards more- 20% of Meniga users have increased use of cards issued by their bank since signing up
89% say they‘d recommend Meniga
How likely or unlikely is it that you will recommend Meniga to your friends?
Mjög líklegt Frekar líklegt Hvorki líklegt né ólíklegt Frekar ólíklegt Mjög ólíklegt0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Very likely Likely Neither likely nor unlikely
Unlikely Very unlikely
PFM increases Efficiency
PFM is a big step towards the „virtual branch“
PFM partly automates the advice customers currently seek in branches.
PFM should be part of a long-term strategy tostay close to your customers
“Personal Finance Management (PFM) functionality is the highest potential ROI project for retail financial institutions to implement in 2010.”
Online Banking Report, May 2010
Offering PFM to your customers is an investment in your bank‘s future...
... but deploying PFM doesn‘t have to be a long and difficult process
Meniga PFM Solution Deployment
Stand-alone web application software
On-premise deployment or SaaS
White-label offering
Flexible and straight-forward integrationoptions for any bank‘s technical platform
Step 1 Step 2
• Re-skin Meniga to match bank‘s branding policy
• Implement back-end integration to allow for secure flow of data (transactions)
Timeframe: Few months
• Gradually increase integration with online bank
• Move towards a seamless user experience
Timeframe: Variable
Stand-alone PFM PFM as part of online bank
Meet us again at FinovateEurope in London on Feb 1st 2011