Many banks are still in the early stages of launching dedicated strategies to serve Generation Y (Gen-Y), a demographic group that is estimated to constitute the majority of wealth accumulators in developed nations over the next decade, according to a new study by Oracle Financial Services and the European Financial Marketing Association.

“Are Banks Ready for the Next-Generation Customer?” presents findings about Gen-Y preparedness from interviews with more than100 key executives at the largest banks in Europe, the Middle East and Africa (EMEA).

Despite the growing economic importance of Gen-Y, 31 percent of respondents say they do not have an active, dedicated strategy for marketing to and serving this demographic segment.  31 percent say they have a dedicated strategy and 38 percent of respondents, however, say their organizations are working on a strategy – signalling growing recognition of the unique requirements and needs of Gen-Y.

Banks without a dedicated Gen-Y engagement strategy appear to be less focused than their peers with active Gen-Y initiatives on three critical parameters for successful engagement with this demographic segment:  utilization of social media as a marketing and communications channel; responsive and flexible customer service; and speed in launching new products.
- Only 31 percent of respondents have a social media strategy in place, a key channel for interacting with Gen-Y – whose members spend a significant amount of time on line and engaged with social media.  By comparison, more than 40 percent of banks with an established Gen-Y focus use social media to communicate and market, and another 26 percent plan to move forward with launching a strategy in the next six months.

- Only 8 percent of respondents say they deliver “Exceptional” service, a key factor in sustaining customer loyalty, while 54 percent say they provide “Good” service.  Of the banks focused on Gen-Y, 15 percent call their service “Exceptional” and nearly 60 percent say that their service level is “Good.”

- While personalized and configurable products resonate with Gen-Y, only 4 percent of overall respondents say they can launch a product in one week.  This compares with 11 percent of Gen-Y focused banks.  This group is also more likely to offer products tailored to Gen-Y, including prepaid debit cards, and partnerships with retail chains.  Both groups are nearly comparable in their ability to launch products in the one-week to one-month range.

Compared to their peers, banks with Gen-Y strategies are more likely to invest in modernizing their retail banking platform, a fundamental requirement for providing more agile service and product offerings.  Banks without a Gen-Y strategy were more likely to be focused on maintaining and upgrading current applications and platforms.

Read more here http://www.realwire.com/releases/Oracle-and-Efma-Announce-the-Results-of-Next-Generation-Gen-Y-Customer-Survey