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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.  

While I don't underestimate the challenges involved in sanctions screening, especially those related to non-English names, what I've seen and heard does lead me to believe that it is possible for banks to surmount them by using currently-available technologies.

(a) The payments landscape in a large UK bank comprises of 4-5 applications, some of which are modern and can accurately process names and addresses containing acute, grav, umlaut and other accents used in European languages, whereas others are legacy and simplistically skip such accent marks. If only the legacy apps were upgraded, the whole payments shop would derive the ability to overcome language-related challenges

(b) Algo trading applications arguably handle far more dynamic data (e.g. stock price data that change far more frequently than whitelists and blacklists used in sanctions screening) yet operate at far lower latency (e.g. milliseconds) as compared to most payments applications. By adopting memory-resident databases and other technologies used in algo trading, payments applications would be more capable of responding to dynamic data.   

Virtually all consumer use of credit card happens after the purchase. In restaurant, gas station, and many other cases, the credit card is presented to the merchant after the consumption - not just after the purchase. In such cases, it would be interesting to observe the proceedings at the point of payment if inControl declines the transaction citing, for example, "you have breached your 'eating out' budget for the month"!  

As marketers shift their attention to creating increasingly fine-grained offerings that are targeted at an 'audience of one', their taste for personally-identifiable - as against aggregate - information will only grow. Kudos to the author for highlighting the possibility that is likely to grow in importance. 

Google has built up a hugely lucrative business around selling AdWords ads to its huge search audience who get it free today. I'm not sure if it would be in Google's best business interests by starting to charge for search in return for sharing surfing habits with partners, for such a move carries the huge risk of killing the golden goose by triggering a massive exodus of Google search users to other free search engines. If that happens, its AdWords revenues would take a plunge. 

Much of the customer's security concerns would get addressed if only either (a) banks agree to issue 'read-only' credentials that can be shared with the Personal Finance Managers, or (b) the PFMs find a way of using a trusted third-party to let customers provide onetime access to their bank accounts - similar to the manner in which merchant websites use Mazooma, BillDesk or iDEAL to let account holders log in to their Internet Banking websites by themselves instead of disclosing any personal information to merchant websites.

In an article I'd published last year on multilingual support, I'd pointed out the risk of non-compliance owing to the tendency of many cross-border payments applications to skip the German umlaut and other European-language accents and thus passing payments that should actually have been blocked. The current incident suggests that banks possibly have more fundamental issues to resolve than making all their payments applications multilingual. Wonder if we've seen the last of this issue!   

Your points are spot on - what SEPA seems to need is high order program management skills. Not sure if we can draw an exact parallel, but I remember that when UK's Payments Council (then known as APACS) faced turbulence of a similar nature with Faster Payments back in 2007, they brought in KPMG to manage the program, which helped a lot to right the course. 

I remember reading an article by Michael Winner in The Times three years ago where he narrates his experience with his bank's relationship manager. According to this article, it took him three telephone calls to have his statement faxed to him by the bank on one occassion - this was despite being a wealth banking customer, with over 20 million GBP in his account. And, when the fax did come, the figures were so smudged that he couldn't make out head or tails with the statement.

Looks like nothing much has changed in the intervening years!

Conventional wisdom has it that changing banks is very painful - "next only to root canal", as I remember someone saying recently. Perhaps, this is what the big banks are banking on, when they continue with their lackadaiscal service levels. It's really up to their customers to prove the conventional wisdom wrong and vote with their wallets by switching to the new generation of banks that have recently sprung up in the UK.

With debit cards, banks get their money immediately, thereby don't incur any financing costs nor face credit risk. Most of them don't give rewards on debit cards. Unlike credit cards that entail incremental account management costs, debit cards are often combined with ATM cards, as a result, enable banks to fund their debit card programs from the savings they obtain by moving their customers away from their branches to much cheaper ATM channel.

Against this backdrop, any amount of interchange fee appears unjustified and dilutes the basic value proposition of debit cards. Perhaps banks realize that the recent US Regulation E amendment that cuts debit card interchange fee is just the start of a journey that would inevitably careen towards a zero-interchange fee regime in the not-too-distant-future. Which might explain their lack of aggression to promote debit card programs.

Credit appraisals, based on which a bank grants mortgages, are based on facts from the past / present and assumptions about the future. e.g. borrower's employment status, income. Like anyone else, banks are not perfect crystalball gazers all the time and therefore carry the risk that their assumptions about the future prove wrong. Insurance helps them mitigate that risk. To that extent, I fail to see any basic disconnect between granting a mortgage on the one hand and taking an insurance against default of that mortgage on the other.

Besides, if banks are able to buy insurance, it means someone is willing to sell it to them. By itself, this should suggest that there is nothing fundamentally wrong about this process.

We hear so much buzz around how regulators should stop banks from repackaging dubious assets and selling them off as Triple-A securities. How about some regulations to prevent corporates and financial institutions (e.g. pension funds) from buying such securities, and to ensure that rating agencies really understand what they are rating and don't grant anything better than junk-bond status to them?