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Consider PFMs for member loyalty

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MADISON, Wis. (8/14/09)--Credit unions and other financial institutions should consider integrating personal financial management (PFM) programs into their Internet banking offerings to increase retention and loyalty, according to several credit union representatives. PFM programs can attract consumers during the economic recession because they are focused on boosting savings and organizing their finances, said Mark Schwanhausser, a multi-channel financial services analyst at Javelin Strategy and Research. Schwanhausser spoke during a July 28 webinar, “Strategic Value of Online Financial Management: Why It’s Important and How to Evaluate Solutions.” Also speaking were: Karen Van Kirk, group product manager at Digital Insight, a CUNA Strategic Service provider; and Tarrah Palomino-Prim, e-services managere at SAFE CU, North Highlands, Calif. The three discussed how PFM programs can help financial institutions--especially credit unions--retain their members. Credit unions that want to market their PFM services should focus on saving money and reducing debt, instead of transactional capabilities. One advantage of a PFM program is the ability to consolidate all financial chores and manage money in one place, Van Kirk said. PFM programs also can provide credit unions with member data. SAFE CU began offering PFM programs in September 2008 through FinanceWorks, a Quicken-based product sold by Digital Insight. Roughly 12.7% of the credit union’s online banking users have used the platform since its rollout, Palomino-Prim said. The average user of FinanceWorks at SAFE CU is 38 years old. The program generates three times the amount of revenue compared with members who use only Internet banking. Account balances of FinanceWorks users averaged $14,523, compared with $10,249 for those who used only online banking. “The number of services and accounts are larger for FinanceWorks users,” Palimino-Prim said. “This is really a sweet spot.”