Benefits & use cases of Personal Finance Management in financial services

Amit Das

Table of Contents

Banks and financial institutions have a wealth of data on their customers including their transaction history, credit history, spending habits, income, and digital footprints, among others. Despite this vast data, they often struggle to deliver personalized experiences and build strong engagement with their customers.

Some of the biggest reasons behind this are lack of investment in advanced technological infrastructure and digital banking platforms, lack of data analytics expertise and reliance on generic offerings that fail to meet customer expectations.

This is where Personal Finance Manager (PFM) comes into play. It provides proactive and personalized experiences to customers by using data, analytics and machine learning.

PFM Driving Customer Engagement

PFM is a digital banking solution that helps customers to better understand their finances by analysing their unique financial behaviour, preferences, and financial data and turning them into actionable digital banking insights. The insights offered by PFM help customers understand, track, manage, and make informed decisions about their finances. It is a consent-based solution that seeks prior permission to access the SMS of customers to deliver insights.

Benefits of PFM for end customers

  • Consolidated account view : It enables customers to view accounts from multiple financial providers in a single place via account aggregation, facilitating effective financial planning.
  • Insightful EOD balances : It empowers customers to view their end-of-day account balances from all user accounts in a single place in real-time, providing a comprehensive overview of their total net worth.
  • Real-time expense tracking : With features like automatic expense categorization, customers gain holistic visibility of where they are spending their money without manual sorting. Moreover, it also updates its categorization in real-time, providing accurate and timely insights.
  • Cashflow analysis and budgeting : Customers can view their month-on-month spending and analyse how their spending habits have changed over time. It also empowers customers to create budgets, set spending limits for different categories and make more conscious financial choices.
  • Comprehensive credit card overview : It provides insights into customers’ credit card summaries including available credit limits on individual credit cards, credit card bills, total amount due, minimum amount due, and due date. This helps customers stay informed about their financial obligations and avoid overspending or exceeding credit limits.
Personal finance management

How PFM Supports Banks and Financial Institutions

  • Transform insights into hyper-personalized actions : With the help of PFM, banks and financial institutions gather data-driven insights which help them engage customers based on behavioural targeting, instead of treating them like mere customers. This targeted approach helps them advise hyper-personalized strategies to their customers to take care of their financial well-being.
  • Increased loyalty and engagement : AI-powered PFM categorizes transactions automatically with precise accuracy, thereby providing analytics and intelligent learning to customers to make informed financial decisions. When customers find value in these tools, it ultimately leads to stronger engagement between banks and customers.
  • Cross-selling opportunities: PFM helps banks and financial institutions gain a deeper understanding of their customers and their preferences. This enables them to identify opportunities to recommend relevant products and services, such as credit cards, loans, saving plans, investment options, etc. This increases cross-selling, upselling and revenue generation for banks.
  • New customer acquisition : Customers today prefer banks and financial institutions that empower them to understand and control their financial information. PFM is a powerful incentive for financial institutions to differentiate themselves and create a new valuable service for their customers, thereby attracting new customers.

How Algo360’s AI-Driven PFM Can Be a Game Changer in Driving Engagement

Algo360’s Personal Finance Manager makes money management easier, smarter and more personalized for your customers. With the help of advanced analytics and machine learning capabilities, PFM provides your customers with complete visibility into their financial health. It enables customers to gain a holistic view of their accounts from multiple financial providers in a single place, categorize transactions, understand their spending, and calculate their net worth.

For financial institutions, it leverages customer data and generates actionable insights by detecting patterns and behaviours of customers in real time. It anticipates the customers’ needs and proactively offers smart recommendations. With hyper-personalized suggestions, customers are offered the right product at the right time, thereby enhancing customer satisfaction and value. Algo360’s PFM tool thus enhances customer journeys and boosts engagement.


The integration of alternate data sources like SMS with AI and advanced analytics in Personal Finance Management modules represents a significant advancement in financial technology. By leveraging real-time data and providing personalized insights, these systems can offer enhanced financial control and inclusivity. However, addressing challenges related to data privacy, accuracy, and user adoption is crucial for the successful implementation of these advanced PFM tools. As technology continues to evolve, the potential for more sophisticated and user-friendly financial management solutions will only grow, making personal finance management more accessible and effective for everyone.

For more information on Algo360 and Personal finance management, contact us here.