The Why Behind Gen Y Financial Decisions

1
The Why Behind Gen Y Financial Decisions
Daniel Penrod CCUL/NCUL ARI
2
Applied Research Institute (ARI)
Focus Groups Los Angeles and San
Francisco Attendees 38 Ages 16-25 Survey
Nationwide Respondents 1292 CA 440 NV
100 Other 752
3
Characteristics of Generation Y

• Adaptable Comfortable in various situations.
• Gadget savvy Grew up with technology.
• Ability to grasp new concepts Learning-oriented
  generation.
• Efficient multi-taskers Do it faster and better.
  
• Tolerant Feel at home in diverse workforce.

4
Characteristics of Generation Y

• Impatient Technology and instant gratification.
• Skeptical Public scams, cheating, lying and
  exploitation.
• Blunt and expressive Self expression is favored
  over self control.
• Image-driven Personal statements with their
  image is very important.
• Strong sense of self Overindulgent parents,
  strong sense of entitlement, the Mr. Rogers
  effect.
• They are still young Lack life experience ask
  questions rather than waste time trying to figure
  it out.

5
Some Numbers

• Teens alone had an aggregate income of 80
  billion in 2006.
• An additional 110 billion in parent-subsidized
  spending in 2006.
• Gen Y is expected to account for 39 of
  households with online bill payment by 2010.

6
Belonging or Individuality?

• Do they want to be part of something
• or to be seen as an individual?

7
BOTH!

• Belonging
• Social networking
• Volunteerism
• Instant Messaging
• Cell phone faves
• Individuality
• Personal web pages
• Personalized credit/debit cards
• iPod songs
• Cell phone skin or configuration

8
Gen Y Financial Education
9
(No Transcript)
10
(No Transcript)
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
Gen Y Credit Union Awareness
15
(No Transcript)
16
(No Transcript)
17
(No Transcript)
18
Gen Y Choosing a Financial Institution
19
Parents lead most financial decisions
20
Parents lead most financial decisions

• COO and co-founder of Brass Media?
• Parents at job interviews?

21
N168 (investment), 199 (Auto), 558 (Credit
card), 733 (Debit card ), 833 (Savings), 848
(Checking)
22
N168 (investment), 199 (Auto), 558 (Credit
card), 733 (Debit card ), 833 (Savings), 848
(Checking)
23

• They are very sensitive to fees and fee
  structures.
• Help me get/build credit.
• They dont know what they dont know.
• Work Attire They do not want you to be dressed
  like them.

24
Gen Y Current Banking Experience
25
Where is Their Money Now?
26
CUs are for savings Banks are for transactional
accounts cards
27
(No Transcript)
28

• Overdrafting is not their fault You are the
  culprit for charging fees for NSFs and account
  abuse.
• Very cynical They do not trust you! They trust
  themselves, their parents and their
  friends/family.
• Stop me from spending! They understand that
  they have a problem with finances.

29
Gen Y Communication Methods
30

• To Text or Not to Text?

That is the question
31
Special Offers
Account Balances
Updates
32
Low Balance
NSFs
Account Alerts
33

• Messages and solicitations through the online
  banking portal are preferred.
• Give straight forward rate comparisons and
  information so they can decide what they want.
• Gen Y wants one-on-one.
• Tellers are NOT seen as credible to cross-sell
  products or recommend servicesThey are just
  tellers.

34
Gen Y Marketing
35
Does your marketing look like this?
36
Or, this?
37
Does your website look like this?
38
Or, this?
39
Are You Branded?
40

• Utilize current members or employees for focus
  groups
• Free, internal sources of feedback
• Tell! Do not sell!
• Sell to the parentsinform Gen Y
• Is your interaction sales-focused or
  knowledge-focused?
• Commercials that sell are disingenuous funny
  gets my attention, but I ultimately want to be
  informed.
• In-branch marketing is successful signage and
  posters catch their attention.

41
What Does This Mean For You?
42
Balance Sheet View of Gen Y

• ARE NOT
• Short-term Return
• 1 3 years
• Return on Assets (ROA)
• Return on Investment (ROI)
• ARE
• Long-term Investment
• 3, 5 or 8-10 year time horizon

43
Take-Home Message

• You have what they want, they just dont know it
  yet!
• Parents can be an effective way to bring younger
  Gen Yers into the fold.
• Field of Dreams philosophy does not work.
• Create reasons for them to come into the branch.

44
Take-Home Message

• You are already viewed as different utilize
  this. (e.g. WAMU)
• They want knowledge from you educate them.
• Shift product/service first to education first.
• Likely a requirement for Gen Next also!
• Target your marketing to their tastes, needs and
  desires.

45
Thank You!