julia beaver
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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 children’s 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
children’s savings
market (age <15yrs)
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 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
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
10© GfK 2015 | Julia Beaver
Current account decision making
Source: GfK FRS-kids
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
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
Don’t 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 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
15© GfK 2015 | Julia Beaver
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
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
Skype
Snapchat
Facetime
Phone calls
Text message onmobile
Online chat (net)
9
9
11
22
27
33
43
40
Video calling
Webchat
Social media
Text message
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
20© GfK 2015 | Julia Beaver
1Driving success
2345
Make an emotional connection
Exploit technology
Establish brand values
Start young
Anticipate change
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