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  • Children of the recessionUnderstanding the financial behaviour of the

    consumers of tomorrow

  • 2 GfK 2015 | Julia Beaver

    This is Abby

    Born 29th Oct. 1998

  • 3 GfK 2015 | Julia Beaver

    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

  • 4 GfK 2015 | Julia Beaver

    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 childrens lives in

    fundamental ways:

  • 5 GfK 2015 | Julia Beaver

    Trusted brands matter

    I only buy products and services from a trusted brand

    All Aged 15-24

    2015

    2011

    GfK Consumer Life, 2015

  • 6 GfK 2015 | Julia Beaver

    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

    childrens savings

    market (age

  • 7 GfK 2015 | Julia Beaver

    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 childs bank

    account is to teach child

    money management skills

    95% of children agree its important to learn money

    management skills at their age

    88% agree its important to save money at their age

    Technology

    56% own Smartphones

    Pre-paid cards with parental

    controls, e.g. Go Henry/Osper

  • 8 GfK 2015 | Julia Beaver

    Source: GfK FRS-kids

    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

  • 9 GfK 2015 | Julia Beaver

    But does Charlie

    really care?

  • 10 GfK 2015 | Julia Beaver

    Current account decision making

    Source: GfK FRS-kids

    Parents are ultimately responsible

    Childs account held at

    parents 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?

  • 12 GfK 2015 | Julia Beaver

    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

  • 13 GfK 2015 | Julia Beaver

    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

    Dont know

    No will definitely switch to

    another account / provider

    Length of time held current account

  • 14 GfK 2015 | Julia Beaver

    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 customer26%

    22%

    My local bank branch is a friendly and welcoming place

    for someone my age to visit

    Despite some disengagement with their bank

  • 15 GfK 2015 | Julia Beaver

    Engagement drivers

    Account held in childs 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

  • 16 GfK 2015 | Julia Beaver

    Source: GfK FRS-kids

    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)

  • 17 GfK 2015 | Julia Beaver

    Implications for future of banking

    How banks

    communicate?

    ?

    Growth of Peer to Peer /

    Crowdfunding?

    A movement towards

    challenger banks?

  • 18 GfK 2015 | Julia Beaver

    New entrants on the horizon

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

    bank revenues by 2020

  • 19 GfK 2015 | Julia Beaver

    Just the beginning?

  • 20 GfK 2015 | Julia Beaver

    1Driving success

    2345

    Make an emotional connection

    Exploit technology

    Establish brand values

    Start young

    Anticipate change

  • Thank you