The Gen Y Recipe for Success: Technology Plus Financial Literacy
Katherine Jansen, senior vice president at Digital Insight, an online banking services provider, said that it is critical for credit unions to help Gen Y get control of their savings.
"Gen Y is getting hammered by the economy," Jansen said. "They've lost jobs, and recent graduates are entering a tough job market. They want to know how they can save and get in control of their expenses."
In order to accomplish this, Jansen said credit union's should hit Gen Y with a one-two punch. The first punch is advertising and awareness in areas that Gen Y are present, such as Facebook. The second punch is backing that up with delivery and services.
Mobile banking is a service that Jansen said Gen Yers expect to be offered. Typically, Gen Y members use their debit cards very frequently, so having alerts and constant access to their account information is how they stay in control of their funds.
"I'm always shocked on how many financial institutions don't have mobile phone compatible viewing Web sites," said Steve King a partner at Emergent Research.
King has worked on a series of reports on small business published by Intuit, the Institute for the Future and Emergent Research; the reports can be found at about.intuit.com/futureofsmallbusiness.
After sitting in on a panel of Gen Yers at a conference, King said that he discovered that this generation is more open to receiving information from their financial institution electronically than most financial institutions are willing to give.
King said that financial institutions can be very successful with Gen Y if they are able to provide those customers with the flexibility to have information feeds to their phones and Facebook pages that they can turn on and off.
"Providing that level of flexibility within systems Gen Y use is very important," King said.
Having a good Web site, mobile banking and online banking and bill pay are what Jansen calls key table stakes.
"If you're drawing this generation to your Web site, then it better be robust and have these types of transactions available. Concentrate on services that will make a difference in their lives. Don't just focus on commodity services."
By offering financial management type tools, Jansen said credit unions can help members manage their money and establish a relationship with them. By helping these members solve problems in their life, such as not having a job, paying off student loans, saving for home ownership or helping them save in general, it will help the credit union retain Gen Yers as members.
"The biggest challenge I have is getting financial institutions to understand that this stuff is not hard," King said. "The biggest mistake these guys make is that they treat it like a project."
King provided an example of one financial institution he was working with to create a new Web site. He said they had the mindset that it would be a large project and had 20 employees dedicated to working on it.
"I told them to take 18 people and give them a real job and keep two employees that were really into it and dedicated to it."
King said with technological improvements and services financial institutions shouldn't be afraid to experiment, fail and a do a lot of playing around.
"You should get it up quickly and make corrections as you go along very quickly. The more you throw at something the worse it usually gets."
Jansen, who works with both banks and credit unions, said that there are a couple of credit union's she's worked with that have been amazing with the way they've approached Gen Y. Generally speaking, she said the most forward thinking credit union's and banks that have used the current market as an opportunity are doing very well.
"With limited resources right now, financial institutions need to pick where they want to fight, and I'd say this is a great place to fight. I ask 'What's the cost of doing nothing?' Gen Y is not just going to sit around and put their money under their mattresses."