|Superior security drives loyalty, but Gen Y is up for grabs|
Offering superior security drives bank loyalty, as one-third of household financial managers indicate that security is one of the top three factors they take into consideration when choosing a new financial institution, says Javelin Strategy & Research.
However, Gen Y (born between 1979 and 1999), the most “plugged in” generation, demonstrates a false sense of security. Almost one in ten Gen Y consumers do not use antivirus software because they use a Mac. Yet last month, more than 600,000 Macs—perceived as the most impenetrable computer—were infected with “Flashback” malware.
Gen Y is a key target market for financial institutions. Their incomes are rapidly rising and will surpass all other demographic groups by 2025, accounting for almost half of all personal income. As financial institutions try to shift consumers toward more cost-effective electronic channels, tech-savvy Gen Y is the demographic most primed to bank online and through mobile channels. Gen Y is aware of security solutions; yet, just 56% of Gen Y consumers are actively protecting themselves against malware compared to 68% of baby boomers. Price sensitivity is a major factor in the use of security software among Gen Y consumers; however the decision to forego electronic security is more than a cost issue. Comfort with electronic channels has fostered a less cautious approach to online activities. Yet this online cohort is precisely the group that would benefit most from antivirus and antimalware solutions.
“If financial institutions really want to move the needle on security with Gen Y, they need to educate consumers the right way, because simply promoting antivirus and antimalware software isn’t effective,” says Vic Wheatman, senior director, Security, Risk, and Fraud at Javelin.
“Financial institutions can work with security software suppliers to build consumer trust in online channels,” says Jim Van Dyke, president, Javelin. “Financial institutions will want to onboard Gen Y as early as possible to increase switching costs, maintain consumers’ satisfaction, transition consumers away from more costly physical channels, and develop long-lasting and profitable relationships.”
[This article was posted on June 18, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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