Debunking The Myths About Gen Yers' Financial Lives

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I collaborated with Oracle recently to do a webinar on the impact that Gen Yers will have on financial institutions’ marketing and technology capabilities. Part of my presentation debunked some commonly held myths about Gen Yers.

Myth #1: Gen Yers aren’t motivated by money.

As evidence of this myth, there’s an article from Insight Magazine which claims that “for Gen Y, money isn’t the be-all and end-all,” the Brazen Careerist has written that “Gen Y is not motivated by money…unless they’re in Sales,” and for good measure I found another blogger who reports that “in my experience, Gen Y is not motivated by money.”

Reality: Gen Yers no less motivated by money that anybody else. First off, every generation has its share of people who are highly motivated by money, and those who are less motivated by money. The views stated above — as I read them — are trying to imply that on the whole (i.e., a higher percentage of), Gen Yers are less motivated by money than members of other generations.

Hogwash. In research conducted by Aite Group, six in ten Gen Yers said that money is as important to them as it to their parents, and a quarter of respondents said it’s more important. Now it’s possible, of course, that someone could have said that money is more important to them than it is to their parents — and still not be motivated by money, if their parents are really not motivated by money. But the myth being propagated here is about the relative view of money on the part of Gen Yers — and the data simply doesn’t support the myth.

And as for the 15% who said money isn’t as important to them as it is to their parents: Just wait a couple of years until they get married, have kids, want to buy a house, a new car, need to save for kids’ college education, etc. Then let’s see how important money is to them.

Myth #2: Gen Yers don’t trust banks.

The San Francisco Business Times ran an article titled “Young adults don’t trust banks” (citing a study of Gen Yers commissioned by Microsoft) while Wallet Pop went beyond that to state that Gen Yers “don’t trust banks, don’t plan to invest in the stock market, and don’t even want to get insurance.”

Reality: Well, first of all, few people trust banks these days. Actually, to be more specific, a minority of people trust “banks in general.” This is an important nuance. In the consumer research that Aite Group has conducted on trust — we partnered with a French consulting firm that specializes in the practice of building business-to-consumer trust, and conducted the study in the U.S., U.K., and France — we found that while few consumers in the regions we surveyed said they trust “banks (in general)”, the percentage that trust their own primary bank is much higher.

And this is particularly true for Gen Yers. In fact, 45% of the Gen Yers surveyed said they trust banks (in general), in contrast to just 33% of older consumers. So myth debunked right there. This shouldn’t be surprising — older consumers have years and years of bad experiences with a lot of the different banks they’ve done business with. They’ve earned the right to be mistrustful. How much experience has a 23 year old had with banks in order to be so mistrustful?

But more importantly, about seven in ten Gen Yers said they trust their primary bank, compared to 73% of the older consumers who said the same. Not a big gap there. And that’s the type of trust that matters most — trust in the bank they do business with, not trust with some amorphous definition of banks in general.

Myth #3: Gen Yers don’t want credit cards.

At a conference I spoke at recently, a competitor of mine said “credit cards will become obsolete – Gen Yers will never adopt them.” US News and World Report, reporting on a book called Not Quite Adults, says the authors of the book found that Gen Yers “meticulously avoid credit card debt.”

Reality: In a study Aite Group conducted at the end of Q4 2010, we found that, indeed, Gen Yers are less likely to use credit cards than older consumers. Only about four in ten Gen Yers used a credit card to make a purchase in Q4 2010, compared to 50% of Gen Xers, and 60% of Boomers and Seniors. But four in ten is still a pretty significant percentage.

And furthermore, “meticulously avoiding credit card debt” is not the same as not wanting/needing credit cards. Personally, I avoid credit card debt as well (hey! I must be a Gen Yer! NOT). And I use a credit card for everything. The reason Gen Yers are less likely to use credit cards has nothing to do with some innate attitudinal difference. The answer is much simpler: They simply haven’t got to the point in their lives when they need a credit card.

When we asked Gen Yers who don’t have a credit card why they don’t have one, the most popular answer was “never had the need, but I anticipate applying for one in the future.” The second most popular answer was “no reason.”


There seems to be a desire among a number of folks — perhaps some Gen Yers themselves — to paint Gen Y as a generation not motivated by that evil evil thing called money, mistrustful of those evil evil people called bankers, and not enticed by that evil evil product called a credit card.

A romanticized view, but not a realistic one.

Here’s the reality about Gen Yers’ financial lives: 1) Money is important to all of this. More important to some than others, for sure, but that difference is not generational-based. Money is always going to be more important to someone starting/supporting a family than someone who isn’t.  2) Trust is tricky thing to measure. For the past few years, banks have been our whipping boys for the sorry state of the economy and financial crisis. It isn’t a generational thing. 3) As Gen Yers get older and their financial needs evolve and their credit scores improve, demand for credit cards will rise. That doesn’t mean credit card debt will rise to the level that previous generations took it to.

But here’s the reality for banks and credit unions looking to profitably acquire and keep Gen Yers as customers: New marketing and technology capabilities are needed. For that part of my presentation, you’ll have to get the deck from Oracle or check out the webinar when it’s posted on BAI’s site.

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