Millennials and Personal Financial Management: How Banks Can Capitalize

Navigator Edition: April 2015
By: Jeff Crawford and Chris Razzano

Personal Financial Management (PFM) tools offering consumers budgeting tools and enhanced visibility into their spending behavior are becoming more widely available. And while not all customers are interested in these services, they appear to be gaining traction with the “Millennial” demographic: customers between the ages of 18 and 34, many of which are digitally-savvy and accustomed to having robust access to information online and via their mobile devices.

There are a number of non-banks in the market with solutions, companies such as, Moven, LevelMoney, and Yodlee, that provide easy-to-use digital platforms that help consumers make informed financial decisions. PFM platforms typically offer a mix of capabilities that simplify budgeting by categorizing transactions, tracking spending habits, budgeting, etc. Moven, a newer PFM tool, is a debit account that tracks spending. Every time users make a transaction with their Moven account via NFC-enabled contact stickers or Moven debit cards, they receive real-time notifications about spending overall and by category. Moven also has P2P and account transfer capabilities similar to other debit accounts. Most recently, Moven updated the functionality of its mobile app to work on the Moto360 and Samsung Galaxy Gear smartwatches (see Figure 1).

Figure 1: Moven Example on Smartwatch
Fig-1_-Moven-ExampleSource: American Banker.

Large banks are also making investments in the PFM space:

  • Bank of America offers a Budget and Track tool (see Figure 2) that allows customers to organize all of their accounts in a single view, even those with other financial institutions.
  • PNC’s Virtual Wallet helps customers manage their finances with an easy-to-read Money Bar that organizes what funds customers are free to spend, how much needs to be set aside for saving, and what funds are scheduled for payment. Spending is also categorized and monitored with alerts to help customers reach savings goals.
  • Wells Fargo’s Money Map provides a spending report, budgeting tool, and savings tools by aggregating transactions from Wells Fargo Credit Card, Debit Card, Checking and Savings accounts, and Bill Pay.
  • Capital One recently acquired Level Money – a money management budgeting app to help consumers track spendable cash and savings.
  • TD recently partnered with Moven to expand its mobile banking functionality.

Figure 2: Bank of America’s Budget and Track and PNC’s Virtual Wallet Money Bar
Fig-2a_-Bank-of-America’s-Budget-and-Track-and-PNCs-Virtual-Wallet-Money-BarSource: Bank of America website,

Research shows that Millennials are a target-rich demographic for these services. According to a BBVA Compass study entitled “The Millennials Paradox,” 70% and 94% of Millennials are active mobile and online banking users, respectively. With increasing levels of student loan debt, Millennials in particular need greater insight into their finances to help them make smarter decisions and ease the financial burdens plaguing recent college graduates.

To capitalize on this opportunity, banks will need to do more than just plug in an existing solution. Solutions that integrate with student loan servicers and offer mobile app and web-friendly interfaces with flexible set-up for alerts and controls will likely be most effective. PFM solutions that are intuitively integrated into already-familiar mobile and online banking interfaces offer financial institutions a better way to engage with these “digital natives” while building loyalty over time.

This hook will be important for banks long-term, because while Millennials represent the next generation of banking customers, Millennials may not feel the same way about banks as their financial service providers: according the BBVA study, “33% believe that they [Millennials] will not need a bank at all.” Financial institutions will need new strategies and service offerings to engage with these customers, and value-added PFM tools may be part of the key to attracting and retaining Millennial customers.

For more information, please contact Jeff Crawford, Manager,; or Chris Razzano, Analyst, Both specialize in Debit and Prepaid.

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