More and more US and European banks are offering PFM solutions in their online banks to strengthen the relationships with their customers and compete with independent PFM web sites such as Mint.com. Customers love PFM but what's in it for the banks? Georg Ludviksson , CEO of Meniga describes the experiences of Meniga's partners and other banks of offering PFM solutions through their online banks. Presentation held at the Bank 2.0 conference in Stockholm on November 16th 2010. See www.meniga.com and www.bank20.se

1. Personal Finance Management (PFM)
is the future of online banking
Georg Ludviksson
Meniga Co-Founder and CEO

2. “PFM’s critically important, it’s a vision of
the future of online banking”
Emmett Higdon, Senior Analyst at Forrester Research

3. 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

4. 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

5. The new generation of online PFM
started in the USA

6. Mint.com launched in 2007
and now has 4 million users

7. ... but banks are slowly taking over

10. One in five US banks now offer PFM
Aite Group: PFM: A platform for customer engagement, February 2010
Over one third of Americans now use online banking
tools to manage their finances
– a 27% increase since 2009
According to Intuit Financial Services: http://www.ifs.intuit.com/
60% more people use PFM provided by banks than
independent PFM web sites
Online Banking Report, May 2010
Consumers are twice as likely to trust a bank over a
PFM web start-up (71% vs 35%)
Javelin Strategy report on PFM Tools

11. Europe had a slower start but is now
also picking up steam in PFM

12. BBVA launched „Tu Cuentas“ in 2008
PFM site separate from online banking
Third of online banking users active

13. Islandsbanki launched Meniga in 2009

14. ING launched TIM in 2010

15. Independent PFM web sites exist in
many European markets...

16. ...including Sweden...

17. ... but they have limited traction
because transactions have to be
manually imported

18. 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

19. Meniga PFM Solution Live Demo

23. User adoption and feedback from
Meniga‘s implementation in Iceland
with Íslandsbanki

24. Íslandsbanki launched an ad campaign

25. Over 20% of the bank‘s online users signed up
within 6 months
Over 75% of new users login again within 2
weeks
Over 25% of users visit more than 5 times in
the first month and become highly active
Average 12 min and 35 pageviews per visit
Excellent Engagement Metrics

26. User Age Distribution
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Younger than 25 25-34 35-44 45-59 60 and older

27. Equal Gender Split
52% Male 48% Female

28. “A huge relief to have a good overview of
my finances.”
Woman in her 30s

29. “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

30. 82% are pleased or very pleased
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Mjög ánægð(ur) Frekar ánægð(ur) Hvorki ánægð(ur) né
óánægð(ur)
Frekar óánægð(ur) Mjög óánægð(ur)Very pleased Pleased Neither pleased
nor displeased
Displeased Very displeased
Overall, how pleased or displeased
are you with Meniga?

31. 88% say they will regularly use Meniga
How likely or unlikely is it that you
will regulary use Meniga in the future?
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Mjög líklegt Frekar líklegt Hvorki líklegt né
ólíklegt
Frekar ólíklegt Mjög ólíklegt Ég mun ekki nota
Meniga framar.
Ástæða:
Very likely Likely Neither likely nor
unlikely
Unlikely Very unlikely I wont use it again.
Reason: “No support for
my main credit card”

32. 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%

33. 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%

34. Why should retail banks
care about PFM?

35. “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

36. 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‘s
customers) say PFM is an important and
valuable service
Stronger effect for an early-mover

37. PFM vastly Increases Customer Retention
Some banks have seen a reduction of up to 50%
in accounts closed after introducing PFM
OnlineBankingReview, 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 profitable
OnlineBankingReview, July 2010

38. 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”.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Mjög sammála Sammála Hvorki sammála né
ósammála
Ósammála Mjög ósammálaStrongly agree Agree Neither agree nor
disagree
Disagree Strongly disagree

39. “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

40. Customer Engagement and Cross-Selling
More and more people prefer never to visit branches
PFM is a major new low-cost channel for engaging with
your 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 products
and services

41. PFM helps you Acquire Customers
Stand-alone PFM attracts new customers
PFM can increase the effectiveness of other
acquisition 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

42. 89% say they‘d recommend Meniga
How likely or unlikely is it that you will
recommend Meniga to your friends?
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Mjög líklegt Frekar líklegt Hvorki líklegt né ólíklegt Frekar ólíklegt Mjög ólíklegtVery likely Likely Neither likely nor
unlikely
Unlikely Very unlikely

43. 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 to
stay close to your customers

44. “Personal Finance Management (PFM)
functionality is the highest potential ROI
project for retail financial institutions to
implement in 2010.”
Online Banking Report, May 2010

45. Offering PFM to your customers is an
investment in your bank‘s future...

46. ... but deploying PFM doesn‘t have to
be a long and difficult process

47. Meniga PFM Solution Deployment
Stand-alone web application software
On-premise deployment or SaaS
White-label offering
Flexible and straight-forward integration
options for any bank‘s technical platform

48. 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

50. Meet us again at FinovateEurope in
London on Feb 1st 2011