[Note: This article was written by Carol Yip and originally published in theStar newspaper on 3/11/2012]

OUR personal finances were once centred on simple conventional banking accounts. But these days, we commonly need to oversee multiple accounts such as banking accounts, loans, credit cards, rewards programmes and investments, as banks offer us more and more integrated financial products and services.

So, are we living in an Internet and technology-driven economy that offers us more choices, yet additional complexity in our financial lives compared to the brick-and-mortar era?

maybank PFM m2u planner

maybank PFM m2u planner

For the technology-savvy individuals and Generation Y’ers, they appreciate the connectivity of online banking because the personal financial management (PFM) tools such as M2U planner invite them to focus their interactions and transactions through the cost-effective online channel by rounding up all these accounts and transaction chores into a simple, intuitive user experience.

Ironically, the added convenience of monitoring and managing finances through multiple banking channels including online banking and mobile banking have actually added complications that can overwhelm us sometimes.

According to a survey of 1,115 consumers by Aite Group , a financial services research and advisory firm, only 16% of baby boomers use the PFM tools (compared with 44% of Gen Y’ers). Half of Mint.com users, the big gorilla in the personal financial management world, are 25 to 34, suggesting that boomers aren’t big Minters.

Not all into PFM tools

Baby boomers generally have far more complicated financial lives than people in their 20s and 30s. Between current accounts, savings accounts, fixed deposits and various loans, fund investments and online trading account with the bank, the older bank customers have a lot of information to keep track of.

As Sally Greenberg , executive director of the National Consumers League, said, “Personal financial management tools give consumers a powerful way to keep track of multiple credit cards, bank accounts and retirement savings.” If so, why wouldn’t it make sense for them to be avid users of PFM tools to manage their finances?

Some boomers don’t. They become frustrated and impatient with banking sites that force them to ferret through separate tabs dedicated to account balances, bill pay, transfers, financial alerts and other components. The lack of interactions with bank officers explaining the products and services lead to older customers not knowing the workings of the online services.

On top of that, it is the users’ responsibility to keep their banking details confidential and safeguard the password access to the different accounts they have. Some feel that online banking is actually creating more work for them.

Online banking services assume the bank customers are financially knowledgeable to navigate their personal finances without the help of financial experts. But not everyone is financially educated. Unless there are conscious efforts to educate consumers about financial products and services available from the bank, making online banking and PFM tools effective for the end-user will be a challenge.

But one thing is universally appreciated: online banking can allow us to avoid going to the banks which are often located in the most congested traffic areas, only to wait in queues within the bank.

Different styles

In order to develop a more detailed understanding of what consumers want in the way of PFM tools, Javelin Strategy and Research studied the following four types of money managers, named for the methods they use to monitor and manage their finances:

● Paper and pen managers, who manage their finances by hand using paper and pen.

● Online balance checkers, who manage their finances in part by logging onto a bank website to monitor account balances and make transactions.

● Desktop PFM users, who manage their finances using personal finance software or spreadsheet programs such as Excel that they maintain in their computer or notebook.

● Web PFM users, who manage their finances using online PFM tools available in the Internet through a bank.

One trait these four types of money managers have in common is that they place a high value on having an all-in-one-place view of their finances. According to the report, when the users are asked what they would appreciate most if their bank offered such a capability, the top five features are:


  • A consolidated financial snapshot of balances and transactions.
  • Up-to-the-minute account balances.
  • Categorised spending insights.
  • Help identifying excess spending and managing debt.
  • Help preparing tax filings.

Providing PFM tools that instil confidence and control will also put banks in the position to win in the marketplace. A combination of consumer needs for financial control, improved technological capabilities and better-designed online banking products are setting the stage for future years when innovative financial institutions take PFM tools out of the shadows of a tab and build them into the heart of online banking.


Reasons to get started

Although PFM technology cannot make a customer’s financial problems disappear, it can alleviate consumer anxiety and make these challenging financial times more manageable.

A survey by Aite suggests that PFM tools can change people’s financial behaviour. In a survey of people who use such tools, three in four said they now have better control of their finances, two in five said they are saving more money, and one in five said they are paying less in late fees.

“With the economic downturn causing more financial headaches for people, consumers have become a lot more disciplined, so they are turning to tools,” says Ron Shevlin, senior analyst at Aite.

There are benefits of using PFM tools as long as we have personal finance dealings with the banks. If you haven’t yet used a PFM tool or application but are thinking of trying one, start by taking baby steps and see if the tool can help you. Otherwise, you could find yourself with a migraine problem wondering if the PFM tool has helped you improve your financial situation.


Carol Yip, Founder of Abacus For Money, believes that if people understand their money mindset, behaviours and money psychology they can be financially happy and successful. She actively promotes financial literacy and intelligence within families and for women, youths and retirees. Email her at [email protected]