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Gen Y in Community Banking

Publications 05.12.2010

Written by Susan Connor, Marketing and Business Development Manager and Published in the Western Independent Banker May/June 2010 edition.

We hear a lot about Gen Y – the Millennials, the Echo Boomers, the Net Gen. They are between the ages of 15 and 32, and at about 70 million strong they represent one of the biggest buying markets in the world. At a time when the financial system itself is in crisis, what does that mean for the industry in terms of Gen Y, both as customers and as employees, and ultimately as executives? I’m an X-er myself. We used to be pretty cool. We were the first generation after the Baby Boomers to really have a name and an identity. First we were called slackers, then we had to get jobs and started having kids, and we started to resemble most of the generations that had gone before – wildly liberal until we figured out what a 401(k) was. But my own cohort generation and I have been thoroughly outdone by those who followed. Gen Y is the most educated, most wealthy, most expectatious (I made that word up) generation this country and this financial system has seen to date.

According to a workplace study by NAS Recruitment, as a rule members of Gen Y have high expectations across the board. They want flexibility in work hours, dress code, and tasks in the workplace. They love instant gratification. Really, it goes beyond love and even expectation to a feeling of entitlement – not because they’re “bad,” but quite simply because they’ve always had more than any generation before them. The Millennials have never known a time without the Internet, without e-mail, without instant messaging. A typical Gen Y’er is not tech savvy, but rather tech dependent, and will often have multiple gadgets all working simultaneously – watching television online, tweeting with a web-enabled phone, online at Facebook or MySpace, text messaging, and listening to downloaded music all at the same time. In terms of banking, they expect to be able to access their accounts (or their parents’ accounts) from multiple channels, quickly, easily and reliably. They are more prepared, earlier, to save for retirement, to understand investment vehicles, and to have a firm grasp of their own financial situation.

At a time when the financial system itself is in crisis, what does that mean for the industry in terms of marketing to this Gen Y? Here’s the thing. It probably doesn’t mean that much different than what it meant for Marketing to Gen X or anybody else. What successful banks do is find profitable customers, ask them what products, services, and technologies work for them, and then they deliver. In all likelihood that tried and true method of marketing to a new generation is not going to wildly change. The answers that we get back from newly profitable customers in the new generation may be different from what we’re used to, but the questions will remain the same. Here’s where I think the differences will come—in approaching Gen Y not just as a customer base, but as employees and ultimately as executives. In today’s economy, people as old as 70 and as young as 15 are all working. Four generations in the workplace, all of whom still need income, benefits, and a sense of a job well done. Community banks, by the very nature of what they do, have a unique opportunity to bring together disparate generations in a frustrating economy, providing not just jobs, but products, services, focus groups, small business opportunities, and a true sense of community. Gen Y is less of a milestone in and of itself and much more of an expansion of many of the markets that community banks already serve so well. Rather than finding “new ways to appeal” to a “new generation,” we are presented with an opportunity to create inclusion not just to employees, but to customers and to the business community at large. So what’s next? Think about the Millennials already in your bank, both the customers and the employees. Start looking at them in a different way, as a rising profitable customer segment, as the leaders of tomorrow. Be willing to embrace their tech dependence, their social networking, their expectations. Then get ready for Gen Z.

Susan Connor is the Marketing and Business Development Manager for Sheshunoff. A Gen-X’er herself, she is the mom of two members of Gen Z and the stepmom of four Millennials. You can contact Susan at (JavaScript must be enabled to view this email address) or (770) 919-8802.