I Must Be A Gen Yer

In the May 28, 2007 issue of Fortune magazine, there’s an article that purports to be a “field guide to Generation Y.” According to the article, the way to spot a Gen Yer is by his or her headphones, clothes (jeans, sneakers, jacket), laptop, designer coffee, BlackBerry, digital camera, and iPod.

I read this article as I unpacked from my trip this week — wearing my jeans, sneakers, and jacket, recharging my BlackBerry and laptop, throwing away the Starbucks napkins I put in my bag in case I spilled coffee all over myself, and listening to my iPod.

So I guess that makes me a Gen Yer, eh?

Hardly. Although I may have the same accoutrements of a Gen Yer, our differences in attitudes towards money and financial services firms is where the real story is at, at least for financial services marketers.

First of all, today’s twenty-somethings are far more involved in managing their financial lives — at this point in their lives — than Boomers were at that age. Boomers “learned” how to become involved in making financial decisions. By “learned”, I mean it wasn’t something we grew up with. Making our own investment decisions was a new behavior we adopted in the past 10 to 15 years. Gen Yers, on the other hand, know no other way. They’ve expected to be involved in making their own financial decisions all along.

Second, Gen Yers are already thinking about the future and their retirement — and they’re not even 30 years old. Forrester Research found that two-thirds of Gen Yers are concerned about having enough money to retire, and that more than one-third have already begun saving for retirement. Boomers were not saving for retirement in their 20s.

Third, Gen Yers are less skeptical and cynical about financial services firms. Boomers have been burned by mergers, economic cycles, and the dot com bust. We’re very mistrustful of financial services firms. Gen Yers aren’t (yet).

Many financial services firms are missing the boat with regard to Gen Yers. By focusing on the 78 million boomers with looming retirement assets and high FICO scores, financial providers are fighting the short-term battle. And missing an opportunity to build strong, long-term relationships with the next wave of consumers. The kind of relationship they don’t have with today’s customers.

p.s. I forgot to mention another difference between Gen Yers and Boomers (at least this one). Gen Yers don’t take extra napkins in case they spill their coffee.

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8 thoughts on “I Must Be A Gen Yer

  1. Ron–

    I’m right smack in the middle of the gen-y generation, but I share few of the physical characteristics. Yes, my Treo is by my side constantly, but I can’t stand coffee and I don’t even have an iPod! That being said, your 3 points are dead on. I think I’m more involved in my finances that my parents are now (if only I could get account balances through RSS I’d be set), and I can’t imagine using a regular stock broker.

    Personally, I think the boomer generation saw most of their parents (my grandparents) retire with nice pensions and health benefits and figured that be the case for them. Now they are learning that’s not quite the case. Us 20-somethings have seen all of this fall apart and there isn’t a chance in hell of us getting social security, so the gen-y population knows to prepare.

    And many (most) FI’s are missing the boat on gen-y. Setting up shop in Second Life isn’t the key. Most of us are going to be technology driven, but we use the technology for simplicity and peace of mind, not necessarily the new hot fad.

  2. Robbie,

    You probably don’t know it but I think something you said is key and brilliant — if only you could get your account balances through RSS feeds. I know every IT person reading this is screaming NO! SECURITY ISSUES!!

    I believe that banking (and I mean that as all financial institutions) is so ripe for revolution. Big time, in your face, damn the man revolution. Banking has been the same for 100 years!!

    There’s a great story about a retiring banker – 40 years in the biz – that was asked at his retirement party what he considered to be the greatest innovations during his tenure. He thought for a moment and replied – air conditioning.

    Gen Y (or the echo of the boom) is the SECOND largest generation in our history. We (again all financial institutions) have to stop being our father’s Buick and change the rules.

    My biggest fear and greatest hope is that someone from your generation will look at this dinosaur we call banking and say, “It doesn’t have to be this hard” and totally blow it up.

    Check out the great blog on CUES too for some insight: http://cuesskybox.typepad.com/skybox/2007/05/young_consumers.html

  3. It’s been 48 hours now, and I still can’t shake this question out of my head: How can Robbie Wright NOT have an iPod?

  4. Shocking, huh! I actually won one at a vendor event as a door prize and gave it away!
    And to your point Denise, I believe there is a growing rank of gen-y employees, patiently waiting for that revolution. Many CU’s will experience a mass retirement in the next 5 to 10 years of veteran top-level employees. Hopefully then, we’ll say (we’re already saying it) this is wrong, and turn cu-ing, not banking, upside down.
    And we’re working on the security issues with RSS…….

  5. Robbie,

    You give me hope. But I still don’t get how you could GIVE an iPod away. I have four. You know, different sizes and colors for different occasions. They are like jewelry to me.

    D.

  6. Exactly. It’s like jewelry. I have an 80gig model for driving, traveling, working. One (a shuffle) for working out with. My wife and three daughters all have one — even the 6 year old. We even let the oldest one listen to her iPod when she does homework to tune OUT the rest of the world.

    Robbie said (on another site) he can’t “think creatively” when he has music on. I think it’s time for some Clockwork Orange-like therapy, Robbie — strap you down in a chair, put some earbuds in your ears, make you drink some Starbucks caffe latte (double shot w/ whole milk), and force you to re-program your CU’s site’s online security algorithms.

  7. Excellent points Ron, there is so much more to Gen-Y than their taste in clothes and music players. Its all in how they view their world.

    Gen-Y has seen their parents and grandparents struggle as they plan for, and enter, retirement. We see that we can’t count on social security or a pension to get us through “the golden years” so we start early in an effort to end up in a better spot.

    @robbie

    I would seriously love having account information sent to me by RSS. It could be like having a daily statement instead of monthly or quarterly. It would make tracking finances so much easier. It would be cool to have the RSS feed go directly to something like Wesebe.

  8. I fall on the Gen Cusp. I just turned 33 (I was told the Y cutoff was 30)

    I wear jeans and a T shirt to work. I dont have an iPod but I have MP3s on my treo. I burn my own CDs to fit my moods. I get my account balance and transaction reports every morning via my Treo email (almost as good as RSS). I watch my FICO like a hawk (Thank you CreditKarma). I bought my first home when I was 28. I was a latch-key kid which I think is the most significant reason Gen-Y’ers are self sufficient – we had to be.

    I grew up where money was a concern so I sold candy in elementary school, got my first job delivering papers at 12 and have worked multiple jobs simultaneously ever since. I think most of the Y persuasion have had a hard time finding work so that only leaves self-employment for cash. I think this is because so many adults are working thos bastians of teenage employment – the burger joint, babysitting and service jobs. So we have been left to our own means of self-support – entreprenuership. This means, we watch our money and understand the dynamics of self determination.

    I think it is these traits that CUs should be paying attention to. This is why the Ygen will make phenom members. They save, they have no problems with using credit cards and when money comes up short, they know how to start a side business.

    Soon, average service ratios will exceed 3 and 4 services per member – if the CUs play their cards right.

    Those are my insights into the new greatest generation.

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