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PERSONAL FINANCE MANAGEMENT

Personal finance management (PFM) is a hot topic however evidence of implementations with real market traction are few and far between. UniCredit recently piloted a PFM service called ‘Family Budget’ in Italy. To find out more Global Banking & Finance Review spoke with Heiko De Simone, Director of the Online and Mobile Banking Redesign Project, UniCredit, and Eva Jasiecka, UK Managing Director – Financial Services, Comarch.

Can you provide an overview of the services Family Budget offers and why it was created?

Heiko De Simone – In October 2013 UniCredit launched a new service in Italy called ‘Family Budget’, a Personal Finance Management (PFM) tool designed to help their customers manage their finances. The service was offered as an addition to UniCredit’s overall online banking offering.

The system automatically categorises customer spending, allows to analyse spending over time comparing also among categories, set limits spending, and many more. In the future customers will be able to predicts future spending and hints on how to maximize future spending and investments. The system calculates the a customer’s monthly budget based on planned and realised incomes and expenses to show how much money can be put towards future investments.

Eva Jasiecka
Eva Jasiecka

Despite having valuable transactional data many banks don’t utilise that information as well as they could do. This data can be used to deliver better advice to customers, and help them to adjust their behaviour so that they can meet goals (saving up for a new car for example). The ‘Family Budget’ PFM tool was created to help transform online banking from a self-service portal into an advisory platform.

How was the pilot program in Italy set up?

Heiko De Simone – The project started two years ago. The first stage was to select a technology partner, which was a very important decision given the strategic importance of PFM to UniCredit as a whole. The key requirement was the ability to customise the PFM tool, to ensure we were able to differentiate the service in the market place. After speaking with numerous suppliers we selected Comarch because of its ability to customise the tool, as well as harness data points from multiple sources to ensure we are able to fully understand financial behaviours.

Eva Jasiecka – The ‘Family Budget’ PFM service is the first UniCredit service to go live using Comarch Smart Finance and is the largest deployment of the technology to date. Comarch Smart Finance is a next-generation consumer banking solution combining internet and mobile banking, personal financial management and smart offers to form a powerful end-to-end customer acquisition and retention tool.

Heiko De Simone – After selection we moved through three phases. Phase one was installation and testing of the tool. Currently we are in phase two, which is focused on customising the service and building out the functionality, such as rules, to flag overspend or put in place limits. Phase three will be about connecting the PFM to our customer relationship management systems so we can use a range of data to deliver a 360 degree view of the customer.

How did the results of the program compare to the projected results? Did any of the results surprise you? Have you fine-tuned the program since its initial launch?

Heiko De Simone – The results have been very satisfactory, outstripping out expectations. Over 500,000 customers have access to the PFM, with one in three visiting regularly. From a qualitative point of view customers have reacted very positively. According to the feedback received the service has been appreciated as “simple to use”, “catchy” and “intuitive”.

Why did you launch the pilot program in Italy? Are there any plans for offering the PFM service in other markets?

Heiko De Simone
Heiko De Simone

Heiko De Simone – We selected Italy because it is a major market for UniCredit, with a big online banking culture. We have four million online banking users, with over 500,000 users transacting daily. The number of customers, the passion for online banking, and the feedback we’d received regarding the need for better planning and advice tools made Italy the obvious choice.
After the successful pilot, we rolled-out the service across the country, and have plans to launch similar services in Germany and Austria in the medium term.

What are the benefits to UniCredit customers?

Heiko De Simone – Supporting customers to understand their own behaviour for both impulse and recurrent purchases, is beneficial for better planning and management of their own money. Ultimately, the tool enables our customers to visualise their financial lives, understand what options are available to them, and helps them to make their money work harder for them.
How does the PFM service benefit the bank?

Eva Jasiecka – The PFM tool will highlight were users have a need to achieve their financial goals. That could be savings products or insurance for example. The PFM tool not only helps identify that need, it can immediately be fulfilled by a personalised offers delivered by the bank, thus allowing for up and cross selling.

Another significant benefit, it enabling more credit card transactions and less ATM withdrawals – customers using PFM quickly realise that cash transactions are difficult to keep track of, and as a result, use credit cards and money transfers more often. And because of the visibility and functionality the PFM tool offers, customers are more likely to transact using the bank’s sevices over the competition to ensure they have a full view of their finances.

And finally, the differentiated service can help the bank acquire new customers and retaining the existing ones.

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