The PFM debate

I cannot agree more, these kind of services should be provided by the banks themselves with the same level of security as it is in their online banking today.

There is a deeper and simpler explanation for low online PFM usage.  Its just too much work.  Back in the day when PFM meant Quicken or MS Money as an app on your computer the usage penetration was in low single digits.  The fact we have online PFM's does not alter that 'too much work' aspect except to the extent that it can download data and automatically sort it as Wesabe had begun to do.

I really cannot see PFM becoming mainstream until customer data can be accessed real time, automatically generate tips, advice and spending assistance with web and mobile being connected.  In theory a bank is best placed to do that but time will tell.

BofA and Wells Fargo are a couple of banks that provide fairly comprehensive P2FM/PFM capabilities on their own websites. However, the insight consumers can gain from them is restricted to their account(s) in the respective bank. This is obviously not too useful given that a person's total financial position and his or her ability to control it is clearly a function of all their accounts - checking, savings, credit card, etc. - across multiple financial institutions. Besides, single bank PFMs are likely to push only their own products, thus making them a biased source of budgeting recommendations.

Cross-account aggregation and unbiased offers are two benefits provided by neutral, non-bank PFMs, and it's difficult to image how banks can match up with them here. 

Even if a single bank PFM seeks to provide cross-account aggregation, like HDFC in India does with its "OneView" service, consumers have to disclose Internet Banking credentials of the accounts they hold with other banks to the PFM-providing bank. But, this seems only slightly less skittish than doing so with neutral PFMs.

Surely, we don't expect one bank to promote another bank's product, so the benefit of unbiased offers is virtually impossible to get from a single bank PFM solution.

In PFM, we see an interesting tradeoff between trust and functionality. This might get resolved only by being more pragmatic about the expectations from a PFM (e.g. visibility versus budgeting) or by the entry of a bank-like trusted entity (e.g. retailer? telco?) into the role of a PFM provider.