I ruined a number of my teeth during my younger years because like all youngsters, I believed I was indestructible, bedtime chocolate bars notwithstanding. These days I overcompensate by offering unsolicited dental advice to friends and family members. As part of this mission, I was looking up flossing statistics on the Internet and I found that only 12% of the people floss everyday even though flossing has been proven to decrease your risk of heart disease and add years to your lifespan.

Please don't tell my boss but said statistical research was being conducted yesterday during office hours and feeling a little guilty about that, I pointed my browser instead to the American Banker website to learn about the latest happenings in our world of banking. Jeremy Quittner's article on personal financial management sites immediately caught my attention.

One of the statistics in this article is sobering. According to research done by Celent, fewer than 4% of online banking customers are active users of PFM. Budget setting, goal management and ongoing vigilance of your finances are a lot like flossing – beneficial in the long run but very tempting to skip in the short run.

Many of the suggestions to improve that adoption rate, such as deeper integration with online banking or creation of a new financial goal setting feature, are expensive and time consuming. They require new software development from the vendors and a big integration testing and rollout from the financial institutions.

The challenge in revamping the PFM feature-set lies in convincing the banks and credit unions that there is wisdom in adding new features to a product with a 4% adoption rate.

We have a classic chicken and egg problem here. The PFM vendors argue that additional features and tighter integration are necessary to bring out the true value of PFM and drive higher adoption rates. Bankers are reluctant to make additional investments on a product with such tiny adoption rates.

It is no wonder, then, that PFM adoption is slow and sporadic. At the few big banks that offer PFM, it is lightly integrated, poorly marketed and not prominently featured on the website.

The problem is further compounded by the payment model used by the financial institutions to pay PFM vendors.

An active PFM user is defined as someone who has used PFM at least once over the last few months (usually three to four months). If a user loses interest in the PFM product and slacks off on his new year's resolutions about managing his finances better (as many often do), the PFM vendor stops getting paid for that user. It's hard for PFM vendors to implement big innovative ideas in the face of such a mercurial revenue stream.

The payment model that a PFM vendor aspires to, but rarely achieves, is what is called an "all-in" model where every user has the PFM product without having to explicitly opt in to it. Payment is made per user regardless of how frequently each user uses PFM. When the bank agrees to this model, it is usually done in exchange for a steep discount on the per-user fee.

Moving financial institutions to the "all-in" model is vital for the PFM industry to thrive. Having a box of floss sitting by the side of every sink goes a long way towards getting more people to floss. Don't hide the floss. Don't wait for people to ask for the floss. Just put it where everyone can see it!

For this to happen however, a few things need to change. The PFM needs to deliver real value to the banker, not just the end user. Just saying that PFM increases customer loyalty doesn't cut it anymore in the post-bill pay world of banking. The value proposition needs to be more attractive in the face of the revenue pressures banks face today.

Enter cross-sell and merchant-funded offers, two ideas that receive mention in Quittner's article. Through this uphill battle by the PFM vendors for end user and bank adoption, the biggest promise of PFM remains unfulfilled. PFM is supposed to help you understand your customers' financial lives beyond the accounts they have with you, and that understanding should bring greater revenues.

PFM aggregates large parts of a user's financial life – her savings accounts, credit cards, investment, insurance and retirement accounts at the host institution and outside, and provides an opportunity for the host to see the big picture of the user's financial life. The bank can use this understanding to generate new revenues and to serve the customer better with a targeted sale of relevant products – both the bank's own and those of third party merchants.

PFM software will have to work with merchant funded offers and cross-sell platforms to add to the bottom line and fully realize the vision that has been spoken about for many years but hasn't materialized. PFM vendors today are missing not only on the opportunity to sell these new products but also the opportunity to give the PFM value proposition the shot in the arm it's needed for a long time.

For PFM to find its way into the boardroom, it needs a bigger, bolder vision and value proposition. Otherwise it may forever have to live in the bathroom – hidden in the medicine cabinet, rather than visible by the sink.

Venkat Rangamani is the Chief Technology Officer at Micronotes Inc., a company that develops campaign management and targeting software for bank cross-sell and merchant-funded offers.