Almost three quarters (72%) of 16 – 25 year old’s have some kind of savings or investment, according to a new study of 21,240 people by user-generated content platform Reevoo and experience design and innovation company, Good Rebels. And, although 36% of their income is being spent on household bills and rent, they aim to set aside on average 20% of their monthly earnings.
Despite the clear interest and concern regarding financial well being, the research also revealed that most iGENs experience a disconnect with the banking industry. Their major pain points included a feeling of distrust and a sense that traditional banks don’t pay enough attention to their needs.
They also feel that financial services is lagging behind other industries in technological evolution. For instance, although nearly one quarter (23%) of those surveyed use a banking app (for comparison, just 6% said they use the popular dating app Tinder), most agreed that these apps lack the functionalities they require. In their own words- “Banking apps have been the same since they were launched, all you can do is check your balance and generate security codes” and “I am not content to stay with a bank that is behind the technology curve.”
UK iGEN consumers are not opposed to shopping around for alternative banking solutions such as those provided by emerging disruptive banks, especially after university. Living independently, they seek different types of financial products from their banks: such as contents insurance or cashback on paying bills.
Marina Cheal, CMO at Reevoo said: “Young adults today have real concerns about money, and it’s no wonder when you consider the huge debts much of the population racks up on education – not to mention the cost of setting up away from the family home for the first time. Yet, it is positive to see that despite their worries, many are actively trying to save and have an interest in their financial situation.
“The biggest banking brands are, however, failing to cater to the needs of the iGEN population, and this is consequently damaging their reputation with this key market. We are seeing a number of smaller, so-called ‘challenger’ banks emerge that are investing in understanding the requirements of the bank of the future and enhancing the customer experience. Traditional banks need to follow the lead of these emerging disruptors, and truly to their customers – particularly the iGEN population. This way, they will bridge the prevalent disconnect between the banking industry and younger generation; helping solve their monetary concerns and supporting them as they aspire to save”.
Laura Dinneen, Insight Partner at Good Rebels, said: “The UK banking industry is at such a pivotal point right now, with changes to financial regulations, the open banking movement, and a surge of challenger banks and other mobile-first banking services launching with many more to come in 2017.”
“For years, banks have failed to meet the needs of their customers, and our study demonstrates that the 16-25 year old age group are particularly disenfranchised. Now is the time to get it right, to bring the consumer experience of banking up to and above that of other consumer service areas, to turn a frustrating necessarily evil into a satisfying experience for this very important customer group.”