Personal financial management

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Personal financial management (PFM) refers to software that helps users manage their money. PFM often lets users categorize transactions and add accounts from multiple institutions into a single view. PFM also typically includes data visualizations such as spending trends, budgets and net worth.


PFM started in 1983 with the founding of Intuit. Scott Cook and Tom Proulx, the company’s founders, witnessed the rise of the personal computer and saw an opportunity to develop personal financial software.[1] Their flagship product, Quicken, became a standard for many households and was eventually followed by QuickBooks, which helped small businesses manage their finances.[2]

Around the same time, a similar competing product introduced by MECA Software, conceived by MECA President Gerald Rubin, and designed by author Andrew Tobias called Managing-Your-Money (MYM) came out,[3] first running on the Apple-II, and later the IBM-PC.[4] Later in 1990 Microsoft released their own PFM platform called Microsoft Money.

Microsoft worked with Intuit and CheckFree in 1997 to create Open Financial Exchange (OFX), which allowed financial institutions to exchange data with web users, paving the way for online PFM software.[5] Yodlee was founded in 1999. Originally a site that let users view email, banking, news, travel, and shopping in one place,[6] it soon pivoted to focus exclusively on banking, allowing users to view their financial accounts from different institutions all at once. Also eWise was founded in 2000 and implemented off-the-shelf digital money management at Australia's Westpac as early as 2001. eWise invented 'client-side' data aggregation, allowing sensitive financial information to be aggregated on an end user's server or chosen device, for example, a smartphone. This form of data aggregation differs from the external server / cloud-based model of 'server-side' aggregation and is considered to offer consumers higher levels of data protection when managing their money over the internet. Because building, managing and maintaining a robust account aggregation engine is complex and requires ongoing effort, many of the PFM providers do not offer their own account aggregation engine. Other providers of account aggregation include Plaid, MX, SaltEdge, Teller, TrueLayer, BudgetInsights and many others following the introduction of open banking frameworks such as PSD2 in Europe.

A wave of online PFM tools launched around 2006, with Wesabe and Mint at the forefront. Mint was acquired by Intuit in 2009 for $170 million,[7] and Wesabe went under in 2010. Wesabe’s CEO cited the fact that Mint automatically aggregated accounts and transactions as a key reason that Wesabe lost market share to Mint.[8] Since 2008, PFM has expanded in scope. Financial advisory companies such as LearnVest, Personal Capital and Credit Karma integrate PFM into their software.[9] Direct banks like Simple and Moven do the same.[10][11] In addition, several companies have focused on selling PFM directly to financial institutions. These companies include Meniga, Digital Insight, Geezeo, MX and Strands, who also help banks deliver digital financial management for small businesses.[12][13] Around 2015, new PFM capabilities driven by advances in artificial intelligence (AI) have been introduced to the market by companies such as Moneythor and Personetics and deployed by financial institutions including the Royal Bank of Canada and UK challenger banks Tandem and Metro Bank.[14][15][16]

Typical features[edit]

At its core, PFM allows users to aggregate financial transactions in one place and then use that data to manage their money. In some cases, these transactions have to be entered manually, but an increasing percentage of products automate the process. PFM typically shows cash flow, spending trends, goals, net worth, and debt management. It also allows users some level of customization for managing their money. New PFM capabilities powered by artificial intelligence (AI) that have been recently introduced to the market include predictive cash flow analysis, personalized financial advice, and automated money management including autonomous savings.


  1. ^ Hopkins, Michael. "America's 25 Most Fascinating Entrepreneurs: Scott Cook". Retrieved 10 March 2014.
  2. ^ Lacy, Sarah. "How To Face Off Against Microsoft". Retrieved 11 March 2014.
  3. ^ "Andrew Tobia$ Managing Your Money (Apple II, 3 1/2" Disk and 5 1/4" Disk) MECA Ventures - 1988 USA, Canada Release - Eli's Software Encyclopedia".
  4. ^ Lewis, Peter H. (29 August 1989). "Personal Computers; Managing Your Money" – via
  5. ^ "History of OFX". Archived from the original on 25 February 2009. Retrieved 11 March 2014.
  6. ^ Kamath, A. "Yodleeing Their Way to the Top". Retrieved 10 March 2014.
  7. ^ Guest Author. "The Value of TechCrunch50: Mint Acquired by Intuit for $170m Two Years After Winning TC40". Retrieved 10 March 2014.
  8. ^ Hedlund, Marc. "Why Wesabe Lost to Mint". Retrieved 16 March 2014.
  9. ^ Merino, Faith. "Credit Karma raises $30M for personal finance tools". Retrieved 16 March 2014.
  10. ^ Ryan, Phillip. "Moven Emphasizes Personal Financial Management Tools in New Video". Retrieved 16 March 2014.
  11. ^ Wisniewski, Mary. "Bankers Struggle to Reimagine PFM for Mobile". Retrieved 16 March 2014.
  12. ^ "Caught in the middle". The Economist. ISSN 0013-0613. Retrieved 2016-07-04.
  13. ^ Ed. "Financial Institutions Flock To PFM Tool Boasting Bubble Budgets". Retrieved 16 March 2014.
  14. ^ Crosman, Penny (September 26, 2017). "RBC's stab at fixing what's broken in personal financial management". American Banker. Retrieved 2018-08-28.
  15. ^ Bhattacharyya, Suman (February 7, 2018). "How UK challenger bank Tandem is personalizing its mobile app". Retrieved 2018-08-28.
  16. ^ Blakey, Douglas (April 17, 2018). "Metro Bank releases AI powered PFM tool, Insights". Retail Banker International. Retrieved 2018-08-28.