KPMG's third Banking on the future report reveals important longer-term patterns as well as emerging trends concerning Gen Y professionals’ expectations and experiences of banking and broader financial services.
Considering Gen Y already make up 22 percent of Australia's population, and will form 50 percent of the workforce in just 5 years, they will be significant drivers of retail banking revenue in the not-too-distant future, and their priorities and preferences are distinctive.
From our research we have highlighted eight dominant forces shaping the way the Gen Y professionals want to bank, and what they demand as customers.
1. Banking in the background
'Invisible payments' and other seamless services are a growing expectation for the Gen Y professional.
2. The relevance of wealth management and financial advice
Gen Y professionals are spending a great deal of time on their financial wellbeing – however, the noble savings account remains the primary investment tool due to its perceived liquid nature.
3. Spending habits: #YOLO (You Only Live Once)
With the rise in social media and the ‘sharing’ culture, Gen Y professionals are spending more on luxury items, experiences and travel. They are delaying big commitments such as property ownership.
4. Cherry picking is on the rise
Gen Y professionals’ evolving perception of value has driven them to hold multiple products with multiple banks, with a significant uplift in multi-banking observed.
5. Digital remains king
Digital banking experience has remained the most highly coveted banking attribute by Gen Y professionals.
6. A bank that travels
Capabilities for when they are travelling or buying internationally are seen as particularly important for this group.
7. Worker by day, entrepreneur by night
Driven by their desire to be independent and innovative, many Gen Y professionals perceive entrepreneurship as the new way to get ahead.
8. The next frontier: banking with tech giants
Over half of the respondents would consider banking with a tech giant if the offer was right.
These eight trends show there is no single route to capturing and retaining the custom of Gen Y professionals. However, it is clear that banks must urgently consider their high expectations, particularly around digital aptitude and wealth, and step up their level of delivery to attract them. Failing to act will ensure competitors, or up-and-coming fintech disruptors, move in and take the prize.