Generation Y has become the most money-conscious and
financially savvy generation following recent global
downturn, according to new research.
Gen Y was more likely to pay off debt and prone to change
financial institutions for the best deal, research firm
Retail Finance Intelligence (RFI) has found.
Research director Alan Shields said Gen Y, which was often
touted as the "instant gratification" generation, was
demanding yet financially savvy.
A person considered to be Gen Y was born in the early 1980s
to the late 1990s.
"Almost three quarters of respondents said they had a savings
goal and were future-focused and not interested in immediate
luxuries," Mr Shields said.
In the research, Gen Y emerged as more financially
responsible than average, displaying a willingness to pay
debt off as quickly as possible.
Only 4% of all respondents suggested they would pay off debt
due to their "sense of obligation", and almost three times as
many Gen Y respondents held the same attitude.
Mr Shield said service, innovation and pricing were also
considered when it came to choosing a financial product or
institution.
Gen Y was more likely to have switched cards and about 68% of
Gen Y respondents valued feature-packed products to a greater
extent compared to the average respondent at 62%.
"They may be lured by competitive rates and features but
we've seen from Gen Y's switching habits that this alone is
not enough to secure loyalty," he said.
"Customer service is the factor that will differentiate
providers and, given this Generations belief in sharing
experiences and information."This tech-savvy generation,
which was first to grow up with the internet, said they would
be willing to pay more fees for online features .
The group is also more pessimistic than the average in their
outlook on the economy and particularly concerned about the
effect of interest rates and economic environment on their
financial situation.
About 70% of Gen Y mortgage holders would consider switching
their loan for a difference in rate of up to 1% compared
to the average of just 43%.
Gen Y was more likely to secure a fixed rate in the next
twelve months, with 42% stating it was at least somewhat
likely compared to the average of 28%.
The study found that another major differences between Gen Y
and their Generation X and Baby Boomer peers their
willingness to act on word-of-mouth advice.
"Recommendations from friends and family came through very
strongly as the largest influence for Gen Y selecting
financial institutions," Mr Shields said.
"In this time of social networking and online research,
people are much more likely to call on their networks for
advice and reviews."Almost one third of Gen Y said they would
take out a transaction account based on a recommendation
compared to the average of 16%.
The study interviewed 10,000 respondents.
