Financial institutions might be inclined to dismiss Generation Y.
By Stephen Nikitas
After all, Gen Y-the demographic group also known as “millennials”-boasts an unemployment rate of more than 13 percent and an average salary of $39,700. But while it may be currently struggling, Gen Y is still very optimistic about its financial future. Nearly 90 percent of Americans ages 18-34 believe they have enough money now or expect that they will in the future.
You should be optimistic, too.
According to Javelin Strategy and Research, Gen Y income will exceed that of baby boomers by 2015. By 2020, its income is projected to exceed that of both baby boomers and Gen X. That’s just seven years away.
By 2025, Gen Y’s combined income is expected to account for 46 percent of the nation’s income. Gen Y consumer spending is expected to grow to $1.4 trillion annually and represent 30 percent of total retail sales by 2020. So, while Gen Y might not have assets or a lot of spending power today, it will. And unless you go after this crowd now and get them firmly entrenched, you’ll miss a huge opportunity.
Gen Y Prefers Branches for Account Opening
Gen Y doesn’t write a lot of checks, but it still needs tools to manage its money.
You might be very surprised to learn that, while it embraces online and mobile banking, Gen Y is more likely to open accounts in a branch. In a 2013 survey by Noverica, only 30 percent of consumers under age 30 said they expect to open their checking account at a bank or credit union website. Of the 30-39 age group, only 41 percent said they expected to open their accounts online. Furthermore, 58 percent of those under 30 said they wouldn’t even consider opening an account at a financial institution that didn’t have a branch nearby!
What this means is that you should actively target young consumers in and moving to your neighborhood to drive them into your branches. At this early stage in their financial lives, they are looking for information and tools to help them effectively manage their money. In addition to checks and deposit slips, they will welcome new account basics such as:continue reading »