Thursday, March 22, 2012

Can Offering Personal Finance Management Services Deliver ROI ...

The success of personal budgeting tools such as Mint.com, which boasts nearly 8 million users, and premium services like HelloWallet, which charges users more than $8 a month ?has, reportedly, led some banks to investigate implementing PFM schemes of their own.

In his latest blog for Finextra, Mark Gerzso asks ?what can a bank win if they offer PFM for their customers??

He argues that one of the quantifiable advantages to offering such services is higher customer retention rates:

?A study made by Gartner Research in 2006 presents that the cost of acquiring new customers is about five times higher than the rate of retaining existing ones, and those new customers are unlikely to be as profitable as expected. Although, the cost of acquiring a new customer varies country by country, it is averaged around 100 ? 300 EUR per retail customer.

According to the PFM vendor Lodo, the annual member retention rates are 98% among those users who used PFM. This is higher than the retention rate for those customers who did not use PFM. If PFM helps reducing the customer attrition ratio only by 1 % point per year, it is already a remarkable saving for the bank.?

Read the full article here

Source: http://blogs.sap.com/banking/2012/03/21/can-offering-personal-finance-management-services-deliver-roi-source-finextra/?utm_source=rss&utm_medium=rss&utm_campaign=can-offering-personal-finance-management-services-deliver-roi-source-finextra

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