Oakland, California (EastBayDaily) — Studies show Generation Y consumers, (those born in the early 1980s to the early 2000s), will earn almost half of the income in the United States by 2025; however, despite their future earning power, young adults are widely misunderstood (and often ignored) by many of today’s financial services providers. Today Comrade, a design & strategy agency, released findings from a joint Javelin Strategy & Research study of nearly 9,000 consumers that highlights top myths about this group and offers advice on how companies can optimize touch points to attract tomorrow’s most profitable banking customers.
Myth #1: Gen Y-ers Are all the Same: Getting in with Gen Y is a “do or die” initiative for digital service providers, and it’s an expensive mistake to treat these young consumers as a single group. Gen Y is actually made up of two groups – those aged 18-24 years who are financially young and uncommitted to any one-service provider, and those aged 25-34, who are highly engaged in financial services, tech-savvy consumers with an appetite for financial products.
Tips to Overcome It: Don’t wait until they’re profitable. Provide the older Gen Y group with products suited to their career-driven life stage. Design digital banking for speed and simplicity to serve the younger audience. Look for opportunities to create financial co-management tools. Opportunities for the older Gen Y-ers lies around budgeting, savings, and education
Myth #2: Gen Y is in large part mobile-only: “Mobile-only” consumers don’t really exist. Although 41 percent of Gen-Y consumers are active monthly users of mobile banking, very few avoid other banking channels. Not only are mobile-only consumers scarce within Gen Y, but also among all age segments.
Tips to Overcome It: View your initiatives through an omnichannel perspective. Take advantage of the unique capabilities of each device type. Support mobile account opening and enrollment. Consider investing in HTML5 with responsive design to create a consistent yet optimized experience.
Myth #3: Gen Y is not Profitable: Given recent regulatory changes and economic pressures from the lingering Great Recession, financial institutions are struggling to find a profitable way to approach young consumers. Gen Y-ers are facing unprecedented student loan debt and a less-than-welcoming job market, suggesting they will be less wealthy and ultimately, less profitable. That said, organizations must think about their long-term revenue potential and must start catering to these consumers who expect convenient, innovative, real-time services that enable them to bank and spend money when and how they want.
Tips to Overcome It: Start now to build a long-term relationship. Focus onboarding on engagement rather than crossâselling. Use alerts to help young consumers avoid missteps.
“Javelin Strategy & Research is committed to research that forces organizations to rethink the status quo. While often overlooked, millennials are a critical audience for financial institutions who want to continue to grow and thrive as the Gen Y group matures financially,” said Jim Van Dyke, CEO of Javelin Strategy & Research. “Comrade is really at the forefront of the next wave in innovation in this space and we’re excited about the power and impact this study offers to financial service providers.”
“Everyone from Fintech startups to large retail banks are tapping Comrade for help designing the next evolution in customer experiences for millennials,” said Thelton McMillian, co-founder & CEO of Comrade. “We recognized that Gen Y has been largely under-served and wanted to partner with a leader, like Javelin, to quantify why and how banks can better meet the needs of this very profitable group.”
To view the full findings and analysis, visit: http://www.comradeagency.com/our-work/three-myths-about-gen-y/.
About the Study The consumer data collected is based primarily on information collected online from 8,732 consumers in October 2013. The overall margin of sampling error is +/- 1.05 percentage points at the 95% confidence level. The margin of sampling error is higher for questions answered by subsegments.
About Comrade Focused on improving the user experience through design, Comrade has delivered over 300 projects to clients in Financial Services, including two of the top three U.S. retail banks, the world’s largest asset manager and three of the top 5 Fintech organizations. Comrade works smart and fast to design and launch innovations like mobile and Web apps that better engage customers and increase revenue. For more information, visit http://www.comradeagency.com/.
About Javelin Strategy & Research Javelin Strategy & Research, a Greenwich Associates LLC company, 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.