julia beaver

Children of the recessionUnderstanding the financial behaviour of the

consumers of tomorrow

2© GfK 2015 | Julia Beaver

This is Abby

Born 29th Oct. 1998


Introducing Generation Z

Generation Y (Generation Rent) Born early 1980s – mid-1990s

Happy to borrow w/ large student debts

Living for now, spending on big

holidays, events

Struggling to get on property ladder

Generation Z Born post-millennial

In wake of 9/11 with formative years

shaped by recession

Expected to be smarter and safer

First generation of true “Digital Natives”


Most children have a digital footprint by age two

How they connect with each other

How they connect with the world

Where they explore their identity

Where they play

Where they learn

Technology now shaping children’s lives in

fundamental ways:


Trusted brands matter

“I only buy products and services from a trusted brand”

All Aged 15-24

2015

2011

GfK Consumer Life, 2015


Average pocket money per week (£)

Source: Halifax Pocket Money Survey, Source: GfK FRS / FRS-kids

Children have buying power

£0.00

£1.00

£2.00

£3.00

£4.00

£5.00

£6.00

£7.00

£8.00

1985

1986

1987

1988

1992

1994

1995

1996

1997

1998

2000

2001

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

£1.13

£6.20

£2.83

450% increase

£50.3bn

Estimated size of

children’s savings

market (age <15yrs)


Source: GfK FRS-kids

And they need to learn about money

What are the drivers?

Government

Child Trust Funds

Junior ISAs

Financial education added to

national school curriculum

Money Advice Service

Society

62% of parents say the

purpose for child’s bank

account is “to teach child

money management skills”

95% of children agree it’s

important to learn money

management skills at their age

88% agree it’s important to

save money at their age

Technology

56% own Smartphones

Pre-paid cards with parental

controls, e.g. Go Henry/Osper



Saving starts at an early age

£2,700

£2,300

8 - 11 years 12 - 15 years

Savings penetration by age (%) Total value held in savings (of those

holding)

9084

79

73

8-9 yrs 10-11yrs 12-13yrs 14-15yrs


But does Charlie

really care?


Current account decision making


Parents are ultimately responsible

Child’s account held at

parent’s main bank

relationship

Reasons for choice of

brand (parent)

Who chose the account

59% The adult

31% The adult and

the child together

6% The child

66%30%

43%

43%

Came with debitcard

Convenientlocation

Where I do otherbanking

So how do you build

lasting relationships?


Source: GfK FRS: Base: All current account holders: Time period: 12 months ending May 2015

Life events often prompt engagement

18 19 20 23 23

All 16+ Finished school /6th form college

Got a job for thefirst time (under-

grad)

Started full-timeeducation

Graduated fromUniversity

Got a job for thefirst time (post-grad)

% Switched or opened additional Current Account away from main bank

Early

life-events

Median age

4.7

10.59.2

11.39.2 9.3


Source: GfK FRS-kids, GfK FRS, base: All main account holders, time period: 12 months ending May 2015

But many are still loyal…

Age Time held (%)

17 1+ years 72

18 2+ years 43

21 5+ years 33

26 10+ years 28

80

“Do you think you will continue to use this as your

main bank account when you leave school and start

work or university?”

59%

4%

37%

Yes – this will still be my

main account

Don’t know

No – will definitely switch to

another account / provider

Length of time held current account


Source: GfK FRS / FRS-kids

Disagree

Metro Bank is one of the few brands

taking measures to actively engage with

families and children

“My bank makes me feel like

it values me and respects me

as a customer”26%

22%

“My local bank branch is a

friendly and welcoming place

for someone my age to visit”

Despite some disengagement with their bank


Engagement drivers

Account held in child’s name

More likely to be involved in decision making process

And promote interactions

And drive satisfaction

Child is older

More likely to check balance

And withdraw money

And pay money into account

Account comes with a debit card

More likely to be satisfied

And more likely to remain a customer



Highly connected

68

56

52

45

30

Tech ownership (%) How do you chat

with friends?

How do you expect to

communicate with bank?

20

22

23

24

27

30

43

64

Email

Skype

Snapchat

WhatsApp

Facetime

Phone calls

Text message onmobile

Online chat (net)

9

9

11

22

27

33

43

40

Video calling

Webchat

Social media

Text message

Email

Phone

F2F in branch

Online (net)


Implications for future of banking…

How banks

communicate?

?

Growth of Peer to Peer /

Crowdfunding?

A movement towards

challenger banks?


New entrants on the horizon…

Competition from non-banks could erode one-third of traditional

bank revenues by 2020


Just the beginning?


1Driving success

2345

Make an emotional connection

Exploit technology

Establish brand values

Start young

Anticipate change

Thank you…

julia beaver

Marketing