LONDON (8/9/12)--If Gen Yers in the United Kingdom are like their counterparts in the U.S., banks might be in trouble with this age group: 83% of young adults age 20 to 29 surveyed in the U.K. said they would not
recommend their primary financial institution (PFI). Credit unions have an opportunity to learn from banks' mistakes and capture this market.
Seventeen percent of the Gen Yers surveyed said their PFI was worthy of their personal endorsement, according to The Young Money survey conducted by London-based financial services consultant MRM. It set out to measure the attitudes of Gen Y toward financial subjects such as banks, money and home ownership. Credit unions weren't mentioned in the survey, but many U.S. credit unions are taking measures to attract the demographic to increase membership for the future.
Big banks are a "turn-off for 20-somethings," said MRM Director Michael Taggart, who cautioned that if banks fail to win their loyalty and trust today, "they are storing up big problems in years to come" (TheFinancialBrand.com
Those surveyed indicated these turn-offs:
- 22% had gone to their PFI only to find it closed;
- 10% said they hung up prematurely during a call to the bank because they were frustrated or angry. Those ages 20-24 were more likely to do this than those ages 25-29;
- 10% couldn't access their account after failing an attempt to verify their identity;
- 7% complained about the bank in social media channels; and
- 3% said they had resolved an issue with their bank through social channels.
The group expressed these worries about their finances:
- 45% (54% of those age 25-29 and 38% of those in their early 20s) said they will never have enough money to buy a home;
- 38% said they have little job security, which makes it difficult to buy a home, while 14% said they did not want to be tied down to a property;
- 14% said that owning property is actually a poor investment;
- 18% had a negative outlook on a home's investment potential; and
- 10% plan to stay home and live with their parents rather than purchase a property.
Gen Yers largely live from paycheck to paycheck, with respondents indicating that they knew of someone in their 20s who:
- Went without food in order to cover expenses or make money (22%);
- Had taken out a payday loan (19%); and
- Had sold their hair to balance their checkbook 3%).
Credit unions can learn from the survey:
- Make sure members know where to go to communicate with you, that your communications are up to date, and that your staff are trained in resolving difficulties clearly in their member service to create loyalty.
- Use social media channels to communicate with this group, but make sure the technology is working and user friendly.
- Offer products aimed at helping this group save and invest their money wisely. Educate them about the advantages of owning a home and about the disadvantages of payday loans. Offer budgeting information to help Gen Y better pace its saving and spending.