STUDENT MARKET: FINANCIAL INSIGHTS (May 2017)

Gen Z and Millennials

Attitudes and Expectations

Checking, Cards, and Credit

Channel Strategies

Key Finding from a Previous Phoenix Synergistics Survey

According to findings from the 2013 Phoenix Synergistics study, Evaluating the Financial Needs of Students, college students and recent graduates were strong users of online and mobile banking channels.  Is this also true for the up-and-coming Gen Z and student group and what would be the ramifications for delivery system strategies?

F252 Prop Graphic

Research Description and methodology

This study examines the financial attitudes and behavior of high school and college students including Gen Z and Millennials.  Their channel usage and preferences are evaluated as well.

National Internet Survey – The survey will include 1,500 Internet interviews with high school and college students comprised of 750 ages 15 to 19 and 750 ages 20 to 25.

Key Dates

February 24, 2017 – Charter fee/Intro pricing ends.

February 24, 2017 – Final acceptance of comments on questionnaire.

May 2017 – Project Report available.

Strategic Questions

  • What is the basic financial profile of students in terms of accounts and services usage and provider relationships? What type of institution do they consider to be their main provider?  Do Internet-only providers have a strong presence in this market?  How extensive is usage of alternative financial providers – such as payday loan centers and pawn shops – by students?
  • How widespread is experience with deposit accounts – checking and savings – among students? In what time frame are these accounts opened?  What factors were important?  How much influence do parents or guardians have in choosing an account?  How are students accessing checking – checks, ATMs, or debit cards?
  • To what extent do students have and use credit cards? What factors or influences were important in obtaining a credit card?  Do debit cards and prepaid cards have a competitive role in the student card market?
  • How extensive is usage of credit products – particularly student loans and automobile loans – in the student market? What factors influence provider choice? How strong is the demand for new loans in the next year?
  • What payment methods are preferred by students for making purchases and why? Is the mobile channel – for POS transactions, P2P payments, and RDC – important in this market?
  • Is there an interest or demand among students for various financial education topics – such as budgeting, managing credit, or saving and investing? What sources – financial institutions, parents/guardians, schools, or government – would be regarded as credible for this type of information?
  • How can students be segmented and targeted for marketing strategies?  Beyond age-based schemes, do variables such as class or grade, sources of income, and dwelling status lend themselves to specific tactics?

Research Issues

  • The large high school and college student market is the up-and-coming consumer group of the future.  This group is comprised of both Gen Z and younger Millennials.  For the past decade, it has been all about the Millennial segment – now here comes Gen Z on their heels.  Having had the recession as the backdrop of their childhood, many industry watchers believe Gen Z will be more financially conservative than Millennials.  As a whole, the student market represents a key launching point for selling financial products and services.
  • To design successful marketing strategies and products for this segment, many questions need to be answered concerning the financial attitudes and behavior of students.  Will this group use traditional banking products such as checking or will they opt for more innovative alternatives?  What is their attitude toward credit and student loans?  Will they prefer credit cards, debit cards or prepaid cards?  Another key issue for providers is the long-term nature of financial relationships established with students.  The provider loyalty of this group may be questionable, particularly with the wide range of competitors vying for a share of the student market – from traditional financial institutions to new online and fintech organizations.
  • This group has grown up with the internet in their pocket and social media as an ever-present part of their daily life. It is essential to evaluate the mix of traditional and innovative banking and payment channels being used by this segment.  In addition, it is important to identify key influencers for this market such as parents, friends, social media, financial representatives, and others.  Educational materials and information about products and services will need to be designed to assist this group in making informed decisions.  Engaging students early and winning their loyalty will be critical to the future growth and profitability of any organization. [F252]