Gen Ys as Financial Consumers: Are Banks Ready?

Many organizations have done surveys and analysed the results of Gen Ys as consumers. Most organizations of varying sectors have realised that they cannot assume that Gen Y customers are the same as previous generations. They have dedicated marketing, product, services and communication strategies all geared to engaging Gen Ys. Banks are starting to realise that if they want to capitalize on this market share that they may have to change some of their current practices.

The Disruption Index: Banking is at the Highest Risk

Scratch, USA based organization, conducted a three year survey with over 10,000 Millennials in 15 different industries (n-gen uses the term Gen Y) and discovered:

• 53% believe that their bank is no different than the others
• 71% would rather go to the dentists than listen to what their bank saying
• 1 in 3 are open to switching in the next 90-days
• All four of the leading (US) banks are among the 10 least favourite brands
• 68% say in 5 years the way we access our money will be completely different
• 70% say in the next 5 years the way we pay for things will be completely different
• 33% believe they won’t need a bank at all
• Circa 50% are counting on tech start-ups to overhaul the way banks work
• 73% would be more excited about new offerings in financial services from Google, Amazon, Apple, PayPal and Square than their own nationwide bank

While we know that there are consumer differences between Canada and the US, we can perhaps use these statistics as a guide-post to what all traditional financial services need to take into account. Other studies that I read did reveal that many Gen Ys recognize that they lack financial literacy and would like advice; but for free. Another said they desire high-touch and high-personalization.

Banking Industry as an Analogy for All Organizations

Certainly, the challenges facing the banking sector are not unique to this industry. Many industries need to acknowledge and prepare to service the Gen Y customer who has high-expectations and wants interactions differently than previous generations. If your organization doesn’t have the internal capability to design and build the technology or service offering that will appeal to Gen Ys, then maybe it is time to partner with a tech start-up. By partnering with a company that brings your organization to the next level, your ‘coolness’ factor may increase exponentially, and your customers will rather come to you than go to the dentist.