The kids are OK

A survey commissioned by Fiserv shows that Gen Y consumers — those between the ages of 21 and 29 — are frequent users of online and mobile financial services, are more likely to have debit cards and savings accounts than any other generation, and rely heavily on other people and online information when making financial product decisions.

“It is clear that Gen Y is actively seeking new accounts as their financial needs evolve,” Geoff Knapp, vice president, Online Banking and Consumer Insights for Fiserv, said in a statement. “This is a formative period for financial institutions to establish strong relationships with Gen Y, and the survey reinforces how important it is for institutions to deliver accessible banking services that will satisfy these consumers’ comprehensive needs.”

The survey, conducted by Accelerant Research, was taken by 3,271 Internet-connected households in July 2009. Responses were categorized by generation: Gen Y (age 21 to 29), Gen X (age 30 to 44), Baby Boomers (age 45 to 64) and Seniors (age 65 and up.)

SURVEY FINDINGS
• Forty eight percent of Gen Y with a credit card signed up for the card online, and 36% of those with personal loans applied for the loan online.

• Eighty percent of Gen Y has used online banking within the past month, a higher percentage than any other generation. One-third of Gen Y has conducted mobile banking activities in the last month, compared to only 11% of baby boomers.

• Forty-three percent of Gen Y plan to perform mobile banking activities in the next year.

• The most common financial activity Gen Y plans to conduct on their cell phone is checking account balances (32 percent). Additionally, 15% plan to receive and pay bills via their mobile device, representing more than 1.5 million Gen Y households.

• Members of Gen Y conduct a larger number of monthly debit card transactions (14.1) than the average household (10.6), but a lower volume of monthly credit card transactions (5.3) than the average household (6.6).

• According to the Fiserv ethnographic interviews, debit cards are Gen Y consumers’ primary method of paying for day-to-day expenses. Many had never been in debt and expressed an emphatic desire to avoid future debt. Others cited negative experiences managing credit card debt, leading to a desire to minimize card use.

• Seventy five percent of the surveyed Gen Y consumers have a savings account, five percent higher than any other generation.

• Gen Y consumers are selective when making big ticket purchases, and spend a lot of time researching products on the Internet. Many said they were more interested in having fun experiences with friends than having a lot of material possessions.

• Gen Y members are most influenced by friends and family, with 68 percent indicating friends and family play a role in their financial decisions. One in four rely on bank Web sites for information, and 11 percent look to online communities for help, indicating a growing importance for financial institutions to maintain and grow online communications.