Succinct and informative analysis as usual.

However, would take issue with the headline — Chip cards are fine — as far as they go. What is fundamentally flawed is the “one size fits all” payments approach used today. And you haven’t mentioned the issues with the RFID tags on cards — which may become as big security hole as mag stripe.

The other area when payments comes up is the role of cash. John Mauldin of Mauldin Economics has a very interesting take in a note published on Saturday called the Cashless Society. http://www.mauldineconomics.com/images/uploads/pdf/20130427_TFTF.pdf
Cash is a long way from dead.

It was 19% a few years ago.

Just like Ireland and Iceland bank wizz kids gone berserk.

At least Gordon Brown protected bank savings consistantly

I am now officially TOTALLY CONFUSED.

Breaking PFM up into components that would be seamless would require much work and getting inside the actual benefits of PFM but I am assuming at some level there would always be at least one of those components that would appeal to most clients.

Re Japan; my observation is that it is definitely not the same. Two of the events on the list (Global Financial Crisis and iPhone) have driven changes in business models that were long overdue. iPhone and associated touch screen technology caught all the Japanese manufacturers flat footed and they went from internationally leading personal devices to no-where over night.

That coupled with the global flight of capital to ‘safe havens drove the value of the yen up by 60% which killed Japanese exports.

So aside from word definition of the word disruption, business is changed inexorably in Japan imho.

I wholeheartedly agree that it is nice to have nice bar & bubble charts showing one’s spending patterns, but it is not enough to drive adoption of the tool, and certainly far from enough of generating any meaningful value for the Financial Institution providing the tool.

The funny thing about saving money is that when one’s disposable income is near zero (or less than zero) it is very difficult to save. Neither PFM nor tip / tricks will solve this challenge.

As is always the case, deploying a feature / function typically fails to deliver the benefits vendors claim in their glossy brochures. Financial Institutions need to pause the spending on the “newest shinning objects” and refocus on developing business strategies that benefit their customers and ultimately benefit their bottom line.

In the US, the biggest problem PFM have is the fact that people aren’t that engaged in the management of their financial lives, and therefore, have little need for what PFM (as it currently exists) offers.

I say “as it currently exists” because most PFM tools focus on budgeting and expense categorization, and pretties that all up with charts and graphs. Problem is, most Americans don’t manage a household budget (after Jan 31), and don’t care about categorizing expenses.

What people want is tips and tricks on how to save more money, and where the deals are (both retail and financial). Until PFM starts to deliver useful advice and guidance, it won’t hit mass adoption.

And it doesn’t have to be integrated into OLB for that level of adoption to occur. Mobile apps — segregated from OLB — will do just fine.

But it is still not at all clear when or how PFM will help banks (and credit unions) improve loyalty (based on measures such as wallet share), revenue, and ROE. Deploying a feature / function just because other FIs are doing it is… imprudent…

Interest rates were kept low with high unemployment and high inflation but low growth.

Prices fell back because nobody felt like spending and inflation is down, employment is improving but the headline growth still looks bad but the trend is good.

Maybe there is an extra parameter at work called ‘feel good’ factor which tilts people between saving and spending.

On the topic of manufacturing jobs, there are some bright spots on the horizon in the US. As labour costs in China and automation technology both continue to increase, there will be less incentive to manufacture abroad if energy and raw material costs are the same. In that regard, the US’s investment in natural gas (fracking) could actually make it cheaper to manufacture there than anywhere else.

The ‘Financial Industry’ created the system so who is going to fix it?

Perhaps the Industry should be working together with our elected Politicians rather than always relying on the ‘Markets’ telling the Politicians where to go.

I see the painful discourse between the EU and G20 as a good example of that happening.

Happy to elaborate over a pint sometime. It’s been too long!

I am certain things have evolved in the last 5 years, however my recent experience with a Tier 1 bank and their commercial offerring suggests things have not changed so radically.

However I do hope things are shifting.

I suspect it also extends to political and economic evolution, good and bad.