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Through A Boomlet of PFM Tools, Banks Offer Consumers Budget Help

PNC, Bank of Montreal and Lloyds TSB are rolling out or enhancing their personal financial management offerings, to meet consumers' psychological need to take control of their budgets.

Maybe it's a post-New Year's resolution phenomenon, maybe it's a response to the ongoing recession, maybe it's part of banks' growing awareness that they need to respond better to customer needs in order to survive the reductions in fee income brought on by the CARD Act and Dodd-Frank, but there's a fresh wave of personal financial management tools being offered by financial institutions and their partners. There was a similar wave last year around this time.

Personal financial management (PFM) refers to just about anything (usually a website or a portion of a website) that helps consumers manage their money, debt, spending and saving better. Examples include, PNC's Virtual Wallet, 1st Mariner's Mariner360, and even SunTrust's LiveSolid Network, which provides self-help articles and information to customers about financial and other topics. Chase's Blueprint program, which lets cardholders set timelines for paying off big purchases, could be put in this category. So could the 11 types of alerts Bank of America lets its customers set up for their checking and savings accounts.

Yesterday, Visa rolled out a service banks can offer cardholders that lets them set a purchase threshold for various accounts. It monitors their spending in certain categories, such as groceries, entertainment and meals out, and alerts them when their spending exceeds that threshold via mobile SMS text, email, and/or online alerts. The thresholds can be set for daily, weekly or monthly spending limits.

PNC Bank has been piloting the new service within its Virtual Wallet product and offering it to consumers and small businesses, enhancing its existing offering, which automatically groups customers' checking and savings account purchases in to categories.

"Customers are constantly looking for tools that help them better manage their money, with mobile and text applications high on their list of priorities," said Thomas Kunz, senior vice president and director of payments and e-business at PNC. "The Visa service will provide our online banking customers with additional flexibility and control over their card spending."

Earlier this month, Bank of Montreal deployed Strands Personal Finance's PFM solution, branded BMO MoneyLogic, to its 2.5 million online banking customers. Like other PFM offerings, MoneyLogic is designed to help increase customer retention and offers automatic categorization of expenses, setting of budgeting and saving goals, and alerts and reports to gain a better view of their finances. (BBVA and ING Netherlands also offer Strands' tool.)

And Lloyds TSB recently launched Money Manager, a PFM offering for checking and credit card customers that automatically breaks down spending into categories like entertainment and provides graphs showing customers where their money is going. It can provide this spending tracking against two years of history as well as current data.

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