Soon PFM (personal financial management)  will no longer be a single product, but will be a way to manage money and make financial decisions in real time, on the go, a new report suggests.

A Javelin survey released last week that asked 3,000 consumers about PFM usage and the features that they use, or would like to use, found that 21% of US consumers use PFM — which works out to 49.3 million PFM users in the nation as a whole. That’s a lot of people. So what’s the problem?

Mark Schwanhausser, director of PFM at Javelin, said, “There is a terrific market for and products for traditional PFM, but it’s aimed at a smaller segment that is not fast-growing. Now we’re into the mobile era and expectations are changing. It’s no longer about the future, it’s about helping customers now, as they shop and make financial decisions. Consumers are looking for more help than just viewing balances. They want to view and do on the go.”

In other words, the power of mobile is changing PFM. The Javelin study indicates that PFM  is not viewed as a “thing in itself” anymore, but rather as a set of features.

“Defined as a product that bolts onto an account — the consumer doesn’t see [PFM] that way,” Schwanhausser said. “Paying bills, shopping — the things customers do all tie together and integrate like threads in a tapestry. It’s not a shrink-wrapped box anymore.”

Instead, PFM is — or should be — about short-term, real time decisions, according to the study. “Which card gives the best reward? What is the right decision regarding debt payment?” said Schwanhausser. “If you help a customer with immediate decisions, if you help them solve a couple problems a day, they’ll say, ‘My bank is helpful.'”

This “PFM 2.0” sounds a lot like some of the benefits promised by mobile wallets. Could PFM 2.0 be a gateway for banks into the difficult and still-unsettled mobile wallet market?

Mobile is changing PFM, and it seems to be changing the market for PFM as well. Schwanhausser described what he called the “Y.2 generation,” young adults ages 25-34, that “wants PFM.”

“They’re younger, they tend to be higher income, they’re thinking more about their money,” he said. “Latinos are active PFM users, more than Asians, more than Caucasians.”

Of primary importance for those surveyed was the ability to see all of one’s accounts in one place, which is a classic PFM feature. Schwanhausser said that alerts were also important. “The [desired] features are not all banking-related. They leverage the power of the smartphone: alerts, reward reminders, price-change reminders.” The smartphone helps the bank move beyond being just a “transactional machine.”

One of the survey’s least requested features, surprisingly, was automatic budget categorization, another classic PFM capability.

While PFM may not be an acquisition tool for banks, it certainly can aid in retention. Schwanhausser described the benefits to good use of PFM:

Deepening relationships, stickiness, retention, cross-selling — even an app store. As an acquisition tool, [the FI should] reinforce that it gives customers control. Switching banks happens because of service and fees; staying is about convenience and practicality.

Schwanhausser described a failing of classic PFM.

“The decision isn’t what’s being served up,” he said. “With mobile, customers can make decisions when they need to. In the PC era, that was revolutionary, and mobile has done it again.”

Different devices demand different PFM solutions: “Customers use tablets — layback usage — differently from on-the-go usage with phones, and from online, Quicken-type usage”

The takeaway for banks should be that PFM is evolving and that the help customers want may not just be planning for a vacation, but for figuring out whether or not to buy a pair of shoes — while they’re in the store looking at them. Help of this kind, providing decision-making tools, and predicting what the customer needs, deepens the relationship with the customer.

PFM will be the focus of a panel discussion at Bank Innovation 2013. Request your invitation here.