1. The “Why” Behind Gen Y Financial Decisions Daniel Penrod CCUL/NCUL ARI

2. Applied Research Institute (ARI) Focus Groups: Los Angeles and San Francisco Attendees: 38 Ages: 16-25 Survey: Nationwide Respondents: 1292 CA: 440 NV: 100 Other: 752

3. Characteristics of Generation Y Adaptable: Comfortable in various situations. Gadget savvy: Grew up with technology. Ability to grasp new concepts: Learning- oriented generation. Efficient multi-taskers: Do it faster and better. Tolerant: Feel at home in diverse workforce.

4. Characteristics of Generation Y Impatient: Technology and instant gratification. Skeptical: Public scams, cheating, lying and exploitation. Blunt and expressive: Self expression is favored over self control. Image-driven: Personal statements with their image is very important. Strong sense of self: Overindulgent parents, strong sense of entitlement, the “Mr. Rogers” effect. They are still young: Lack life experience; ask questions rather than waste time trying to figure it out.

5. Some Numbers… Teens alone had an aggregate income of $80 billion in 2006. An additional $110 billion in parent- subsidized spending in 2006. Gen Y is expected to account for 39% of households with online bill payment by 2010.

6. Belonging or Individuality? Do they want to be part of something or to be seen as an individual?

7. BOTH! Belonging –Social networking –Volunteerism –Instant Messaging –Cell phone “faves” Individuality –Personal web pages –Personalized credit/debit cards –iPod songs –Cell phone skin or configuration

8. Gen Y: Financial Education

14. Gen Y: Credit Union Awareness

18. Gen Y: Choosing a Financial Institution

19. Parents lead most financial decisions

20. COO and co-founder of Brass Media? Parents at job interviews?

21. N=168 (investment), 199 (Auto), 558 (Credit card), 733 (Debit card ), 833 (Savings), 848 (Checking)

23. They are very sensitive to fees and fee structures. Help me get/build credit. They don’t know what they don’t know. Work Attire: They do not want you to be dressed like them.

24. Gen Y: Current Banking Experience

25. Where is Their Money Now?

26. CUs are for savings – Banks are for transactional accounts & cards

28. Overdrafting is not their fault – You are the culprit for charging fees for NSFs and account abuse. Very cynical – They do not trust you! They trust themselves, their parents and their friends/family. Stop me from spending! – They understand that they have a problem with finances.

29. Gen Y: Communication Methods

30. To Text or Not to Text? That is the question…

31. Special Offers Account Balances Updates

32. Low Balance NSF’s Account Alerts

33. Messages and solicitations through the online banking portal are preferred. Give straight forward rate comparisons and information so they can decide what they want. Gen Y wants one-on-one. Tellers are NOT seen as credible to cross-sell products or recommend services…They are “just tellers.”

34. Gen Y: Marketing

35. Does your marketing look like this?

36. Or, this?

37. Does your website look like this?

38. Or, this?

39. Are You Branded?

40. Utilize current members or employees for focus groups –Free, internal sources of feedback Tell! Do not sell! –Sell to the parents…inform Gen Y –Is your interaction sales-focused or knowledge-focused? Commercials that “sell” are disingenuous – funny gets my attention, but I ultimately want to be informed. In-branch marketing is successful: signage and posters catch their attention.

41. What Does This Mean For You?

42. ARE NOT –Short-term Return 1 – 3 years –Return on Assets (ROA) –Return on Investment (ROI) ARE –Long-term Investment 3, 5 or 8-10 year time horizon Balance Sheet View of Gen Y

43. Take-Home Message You have what they want, they just don’t know it yet! Parents can be an effective way to bring younger Gen Y’ers into the fold. “Field of Dreams” philosophy does not work. –Create reasons for them to come into the branch.

44. Take-Home Message You are already viewed as “different” – utilize this. (e.g. WAMU) They want knowledge from you – educate them. –Shift: product/service first to education first. –Likely a requirement for Gen Next also! Target your marketing to their tastes, needs and desires.

45. Thank You!