Young Consumers are Transforming Retail Banking
In the wake of the recent economic downturn, a retail banking study was undertaken by Cisco IBSG. It looked at a broad cross-section of American consumers, their financial priorities, technology usage, preferences and attitudes towards banks. I found the results surprising.
The study suggests that banks need to embrace the Gen Y population. Interestingly enough, when I looked at Gen Y spending ($62/day), I found that it equaled boomers spending for the first time. Gen Y differ significantly from the boomers when it comes to the delivery of information and advice. This new generation wants to use video, social networking, mobile phones and web-based personal financial management (PFM) tools.
Even though the financial crisis led 54% of Americans to lose trust in financial institutions in general, the findings suggest that consumers still trust banks. 85 percent of Gen Y are satisfied with their current banks, which is fascinating to me considering the economic landscape of the last few years. More than one-third of Gen Y consumers want help managing their financial affairs and they want help to come from their banks. Apparently, due to a void of services from banks, this generation is currently getting advice from friends and family. Yet, they really would like more professional advice. More than one-third of Gen Y prefer using professional advisers as their source for financial advice, ahead of peers, personal research, or automated tools. And, the point that I found most interesting, nearly 40 percent of Gen Y are interested in interacting with an adviser via video, as compared to 17 percent for boomers/silvers.
This is good news for all of us who would love to use our web cam to talk to a financial representative from the comfort of our home or office at a time that is convenient for us, not between the hours of 9-5, Monday-Friday. Check out the full study at http://www.cisco.com/web/about/ac79/docs/fs/nextgrowthopportunityforbanks.pdf