Javelin Identifies Gen Y Banking Needs and Recommends Relationship-Building Strategies
San Francisco, CA, January 22, 2013 – Slow economic recovery, soaring student debt, and unprecedented unemployment have created two distinct Gen Y consumer segments with very different financial behaviors--Y.1 consumers (ages 18-24) and Y.2 consumers (ages 25-34). Javelin Strategy & Research’s latest report A Tale of Two Gen Ys: On the Road to Long-Term Banking Profitability explores the differences between the Y.1 and Y.2, examines key trends and their impact on revenue and costs to financial institutions (FIs), and makes specific recommendations on how FIs can develop long-term profitable relationships with both Gen Y groups.
“By 2025, Gen Y will account for 46% of the nation’s income, making them a critically important consumer segment for FIs, “said Javelin analyst Aleia Van Dyke. “But FIs can’t afford for wait to influence Gen Y financial behavior.”
Like previous generations of young adults, Y.2 consumers are in the stage of life when they establish financial behaviors and relationships. What’s different about Gen Y consumers is they were raised in a digital era and their financial outlook has been framed the recession. Gen Y.2 consumers are more likely to conduct online and mobile banking than all consumers, but the recession has created many financially cautious Y.2 consumers who still want person-to-person contact. Surprisingly, Gen Y.2 prefers to conduct regular transactions in person at bank branches, at a rate of 2.5 times greater than those consumers over 65 years old. These in-person branch visits add up to a significant cost for FIs, compared to self-service channels such as mobile banking and ATMs.
“Gen Y.2 consumers have taken control of their financial lives, many are struggling to stretch their paychecks, and they’re hungry for better ways to stay on top of their finances,” said Mark Schwanhausser, Director of Multichannel Financial Services at Javelin. “They’re making it clear that if their bank or credit union can’t provide the PFM tools they need, then they’re willing to turn to merchants, mobile carriers, PFM apps, and billers to gain the control they crave.”
Javelin Strategy & Research’s report, A Tale of Two Gen Ys: On the Road to Long‐Term Banking Profitability analyzes the financial behaviors of both Y.1 and Y.2 consumer segments and recommends strategies for FIs to maximize profitability from relationships with both these groups. This report is based on data collected online in three surveys of more than 12,000 respondents. The report is 34 pages long and contains 15 figures and graphs. The report references Amazon, Starbucks, Google, Apple, BlackBerry, Windows, AT&T, Verizon, Mint, Pageonce, HelloWallet, Comcast, and Toyota.
About Javelin Strategy & Research
Javelin Strategy & Research, a division of Greenwich Associates, provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. Javelin’s independent insights result from a uniquely rigorous three-dimensional research process that assesses customers, providers, and the transactions ecosystem.