Banks Try to Win Hearts (and Wallets) with Personal Finance Tech
Pic by Alan Cleaver at Flickr Creative Commons
Mint.com, Wesabe, Bundle.com and other personal finance technology hubs were the first to recognize the democratizing power of technology in the money management sphere.
Online personal finance tools can unleash a team virtual accountants and analysts in your laptop.
You can now run reports and check graphs on everything from creating a budget to monitoring your spending habits to pinpointing your best investment returns.
Now, banks and credit card companies are growing wise to this tech trend and bolstering their own sites and online banking portals with personal finance technology.
Most customers are wondering, “what took you so long.”
According to My Bank Tracker, about half of the banks are offering these tools.
“Presently, the number of banks offering personal finance management tools is still less than 50% of total US banks, with small banks and credit unions being the more aggressive in implementing these initiatives. Some of these institutions even offer forums within their sites where customers can ask questions about their finances.”
So, why the new found interest in their customers’ personal financial condition?
“The more informed customers are about their financial lives, the better customers they make for us in the long term,” said Michael Upton, Bank of America senior vice president.”
So, they noticed that Americans are:
1) Tech savvy
and 2) Concerned about their financial status.
I try not to be too cynical, but there may be other reasons. Our faith in banks has faltered. Banks are also looking for other revenue sources. These tools may be more of an way to explore new revenue sources than an attempt to empower the customer.
What do you think? Has anyone used their bank’s money management features?
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
Not to the extent you mention. I’ve set up bill pay so that I can automatically have checks sent to my landlord and daycare provider without having to remember to do it myself. But that’s it.
I have a similar issue with a loan payment. But I try to add extra (and varying amounts) of money on the principal, so it’s hard to automate.
It’s funny because since the renaissance Banks have hinged on people being financially illiterate – you think the Fed would have been tolerated throughout the great depression it caused if people knew what fractional reserve banking was?
Now they’re paying lip-service as the system begins to choke on its own tail, but in the process people might actually become financially literate en masse, and when that happens the whole system is going to break and have to be replaced by a new one. I only use banks as clearing engines and try to keep my liquid net worth in that 10% of the money supply that is physically accountable, because I know that the odds trade is in my favor for that (assuming the money is kept physically safe). If more people did that then the banks would all be forcibly insolvent, instead of discreetly insolvent as they are now. The only real advantage to keeping your liquid assets in the realm of the digital is convenience, Banks are going to get their margins squeezed as they become less oriented towards finance and more towards services.
That’s a very solid observation, Patrick. I don’t have a crystal ball, but it will be interesting where this leads.