![]() You’re financially healthy if you spend less than a certain percentage of your income. You’re achieving high performance if you optimize the return on your savings and investments. You’re financially healthy if you save a certain percentage of your income. There’s a difference between high performance and financial health when it comes to: Performance versus health? This is just mincing words, no? No. But that’s not what consumers want-or are willing to pay for. In these tough economic times, many financial institutions and fintechs are focused on helping consumers improve their financial health and wellness. Budgeting and expense categorization provide insights into how much and where someone spends money, but having bottom line impact on consumers’ financial lives is what consumers really want-and are willing to pay for.Ģ) Performance trumps health and wellness. In fact, there are a couple of lessons banks-and Credit Karma, for that matter-should take away from the demise of Mint and PFM:ġ) Impact trumps insight. It’s not an “opportunity”-it’s a lesson and a threat. The Lessons Banks Should LearnĪ recent Yahoo! Finance article claims that “Mint's shutdown is an opportunity for banks.” The PFM market morphed and passed Mint by-as have millions of former users. Mint, however, does none of these things. And many other things (beyond budgeting and expense tracking). These fintechs are doing things like: 1) canceling unwanted/unused subscriptions 2) finding opportunities to reduce monthly bills 3) automating how much consumers save on a regular basis. What these thriving fintechs do is financial performance management (I harbor no delusions that the acronym FPM will gain any currency). And-for better or worse-this is how many in the banking and financial services industry define PFM. What’s emerged since 2015 are a number of thriving fintechs who say they’re in the personal financial management space.īut they don’t do budgeting and expense categorization. There are some fintech entrepreneurs who-if they haven’t left this web page yet-can’t wait to tell me how wrong I am about the death of PFM. In effect, between 20 the personal financial management space-where PFM=budgeting and expense categorization-died. Spending even more for budgeting and expense categorization isn’t.well.in the budget. Consumers already spend a lot of money to manage their financial lives. As much as financial experts tell us we need to budget and categorize our expenses, many (if not most) of us don’t do it.Ģ) Consumers didn’t-and still don’t-want to pay for budgeting and expense categorization. That’s because many providers of PFM tools have disappeared (e.g., Wesabe) or pivoted to other strategies (MX, Geezeo).ġ) Historically (i.e., from 2001 to about 2015), PFM tools were predominantly budgeting and expense categorization tools. While the drop in Mint’s user base is precipitous, Intuit should be congratulated for maintaining any level of user engagement.
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