To help financial institutions break down the barrier to Gen Y, two companies have conducted studies and research on the wants and needs of this heavily sought after generation.
Fiserv, a financial services technology solution provider, conducted a survey and one-on-one consumer interviews with Gen Yers to understand what the generation is looking for from financial institutions.
One of the findings from the survey was that consumers in the Gen Y age range have a high propensity to use debit cards. The survey showed that Gen Y consumers conduct on average 14.1 transactions with their debit cards each month. The average household conducts 10.6 debit card transactions per month. However, the average household conducts 6.6 credit card transactions a month, and Gen Y consumers conduct 5.3 credit card transactions per month.
According to Geoff Knapp, vice president of online banking and consumer insights at Fiserv, said that the high use of debit cards by Gen Y provides financial institutions with the opportunity to take on an advisory and money management roll.
"Smart banks and credit unions will evolve tools that allow consumers to set up budgets, show what they are spending money on and how to save money," Knapp added.
Another finding from the survey was that Gen Yers are more prone to recommend a financial institution or to say what they dislike about a financial institutions than other generations.
"With the emergence of social networking financial institutions need to think about the way they treat Gen Y customers," Knapp said.
Bill Handel, vice president of product development at Raddon Financial Group, said that the research Raddon has conducted shows that social media is extremely important when it comes to Gen Y, but financial institutions need to be careful.
"Gen Y consumers won't pay attention to marketing through social media, but they will pay attention to advice. They are looking for honest and clear advice without someone trying to sell them something," he explained.
Because of the technology that has allowed Gen Y consumers to change relationships easily, holding on to Gen Y consumers is a challenge, Handel said. One of the most effective ways to get and hold on to Gen Y consumers is through their parents.
Parents of Gen Y are baby boomers, or also known as the Helicopter Generation, Handel said, because they hover over their children. This has created a certain level of dependency, and Gen Yers will look to mimic their parents in the way they do things, including where they bank.
"Financial institutions need to look at marketing through the parents. While this will not work universally, it will be more successful with this generation than any previous generation," Handel said.