The slow economic recovery from the Great Recession has forced young Americans to confront a dismal financial reality marked by unprecedented student loan debt and soaring unemployment. Financial institutions (FIs) are struggling to identify ways to serve the unique needs of young consumers while also maintaining a profitable business model. But today’s young consumers are hardly a monolithic generation; this group is made up of two distinct age segments that act in significantly different ways. This report will explain the key differences between these two young age segments, including overall characteristics, use and desire for personal finance management (PFM), their banking relationship, and their mobile preferences. The report will also discuss the long-term investment advantage to each of these trends and the overall implications for FIs, providing pointed recommendations on how to maximize long-term banking relationships with these two groups.

Primary Questions:

• How does achieving Gen Y loyalty result in long‐term ROI benefits?
• What are the two key subgroups of Gen Y, and what are their key differentiating characteristics?
• How will encouraging positive banking behaviors early on result in a win‐win for banks and Gen Y consumers?
• How do the Gen Y subgroups differ in their online‐ and mobile‐banking habits?
• How willing are Gen Y consumers to go to third‐party competitors for their banking, mobile, and PFM needs?

• A random‐sample panel of 3,000 respondents collected online during August 2012. 
• A random‐sample panel of 3,492 consumers with mobile phones or smartphones in June 2012. 
• A random‐sample panel of 5,102 respondents collected online in March 2012.