Fiserv sponsored a survey of the Gen Y demographic and found they are hooked on mobile bill pay and banking, proving that Baby Boomers have truly slipped into the unhip generation they thought they’d never be.
Thirty-three percent of Gen Ys – those between 21 and 29 years of age – conducted mobile banking in the last month, compared to 11 percent of Boomers, and 43 percent plan to pick up the mobile banking habit within the next year. Fifteen percent plan to receive and pay bills soon on their mobile phones.
This group is more likely to have debit cards and savings accounts than any other generation, and rely heavily on other people and online information when making financial product decisions. The Fiserv-commissioned survey, conducted by Accelerant Research in 2009, was supplemented by ethnographic research, consisting of one-on-one consumer interviews, to better understand the consumer sentiment behind the survey findings.
"It is clear that Gen Y is actively seeking new accounts as their financial needs evolve," said Geoff Knapp, vice president of Online Banking and Consumer Insights, Fiserv.
Gen Y consumers have sought the largest number of banking services within the past year. Thirty-six percent opened a debit card, savings or primary checking account, ten percent higher than any other generation. They are more likely to sign up for and use new accounts and services online, versus at physical branches. In fact, 48 percent of Gen Ys with a credit card signed up for the card online. Thirty-six percent of those were with personal loans applied for the loan online.
Eighty percent of Gen Y has used online banking within the past month, a higher percentage than any other generation.
The most common financial activity Gen Y plans to conduct on their cell phone is checking account balances (32 percent). Additionally, 15 percent plan to receive and pay bills via their mobile device, representing more than 1.5 million Gen Y households.
According to the Fiserv ethnographic interviews, debit cards are Gen Y consumers' primary method of paying for day-to-day expenses. This potentially reflects a trend toward fiscal responsibility among young adults, as many had never been in debt and expressed an emphatic desire to avoid future debt. Others cited negative experiences managing credit card debt, leading to a desire to minimize card use.
The Fiserv survey represents a helpful blueprint for financial institutions to strengthen their relationship with Gen Y consumers. Currently, less than half of Gen Y households are definitely satisfied or completely trust their primary financial institution. However, Gen Y recommends their primary financial institutions significantly more often than older generations, so elevating their satisfaction rates can amplify referrals made within social networks.
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