The pandemic has been an inflection point for young adults’ attitudes toward money. Here, Laura Parr, strategy and insights manager of financial services for Google Australia & New Zealand, illustrates how brands and marketers can better understand and reach this important demographic.
The challenges brought on by COVID-19 altered life for each generation of Australians in different ways. Specifically, the pandemic impacted Australians’ studies and employment — as well as their money. Overall, 1 in 3 Aussies’ finances were impacted. When we zoom in to look at young people between the ages of 18 and 29 specifically, this number increased to 45%.1
The pandemic and its aftermath have triggered ongoing money concerns and changed the financial behaviours of young Aussies. Now, financial service institutions have to adapt to serve this generation. By helping this generation act to improve their financial literacy, banks and financial service groups can work with and acquire the next generation of customers. But in order to get there, these groups need to better engage with young people, empathise with their financial concerns, and ensure their communications resonate — as well as offer features such as compelling services, positive customer experiences, and improved online tools.
Shifting financial literacy and knowledge behaviours
Amid a historically low interest rate environment, stagnant wage growth, and job insecurity over the past year, there's been a renewed interest in personal finance — and for an entire generation of young Aussies, this means changing their behaviours and knowledge about managing their money. For one thing, young Aussies have become more cautious with their spending as a result of the pandemic. With their ability to earn and save compromised, 56% of young Australian adults are managing their money more carefully.3
The instability caused by the pandemic has made future-proofing finances a priority for many Australians, but especially the next generation — 92% of young Aussies have engaged in activities to increase their financial knowledge, an indicator that young people now care about and are being more proactive with their money.4
Online video resonates with young people, and provides them with valuable, easy-to-understand information — especially with respect to their finances. Twenty-three percent of 18 to 29 year olds watched online videos to improve their financial literacy, and 80% found them helpful.6
Young people are looking to future-proof their finances, and banks can respond by connecting them with apps, budget tools, calculators, and online resources to help them manage their money. And by capitalising on young people’s desire for online video content, banks can provide topic-led videos with engaging delivery and credibility.
The products young Aussies find the most important today
After a year of turbulence, young Australians are searching for financial products and services that will cater to their newfound behaviours and habits to help them save money to be smarter with their finances. Sixty-three percent of those ages 18 to 29 are looking for good value for money products and services.8 Given affordability concerns, COVID-19 has been a catalyst for this generation to compare prices and find the best deals available to them. Brands can address this desire by offering relevant and compelling offers, and leveraging behavioural biases that speak to the "power of free,” for example.
"More so than any other group, young Aussies’ changing financial behaviours demand attention, understanding, and empathy. They were hard-hit by the pandemic,” said Leonie Valentine, managing director at Google Melbourne and Government. “Financial institutions and brands that move quickly to build better online tools, digital resources, and product offerings that cater specifically to this generation — and help them to instill new money-related habits — will ultimately succeed.”
COVID-19 has also had an impact on the importance this generation of young Aussies places on finance products — 59% of 18 to 29 year olds say a savings account is more important now than before the pandemic.9 They also say an everyday savings account (53%), stocks or equity investments (46%), and comprehensive car insurance (36%) are more important to them now than they were prior to the pandemic.10
Young Aussies’ habits regarding customer service have also changed. To resolve customer service issues, 54% of 18 to 29 year olds want to chat with someone, and 47% want to visit a physical storefront or branch nearby.12 Yes, this generation is digital-first and incredibly technologically savvy — but they’re still looking for help offline, and brands can capitalise on this demand by using online to drive offline behaviour.
How brands can engage
Our research shows that young Aussies will gravitate toward brands that demonstrate they’re invested in improving financial literacy and can help them make better financial decisions.
When it comes to specific financial institutions, the Big Four — Commonwealth Bank of Australia, Westpac Banking Corporation, Australia and New Zealand Banking Group, and National Australia Bank — are still the go-to banks for young Aussies. They have a high market share, with 69% of 18 to 29 year olds having an account with one of the Big Four.14 These established players have strong reputations and trust, and are seen as safe and secure options — even with younger Aussies. Banks can invest in their upper funnels to drive top-of-mind awareness and consideration with this younger generation.
Young Aussies are the biggest drivers of digital disruption — and that extends to their relationships with banking, too. Sixty-seven percent of 18-to-29-year-old Australians say they use or would consider using a digital bank in the future.15 By continuing to invest in their digital strategy and apps, brands can illustrate that they’re customer-centric. They can use their websites and apps to highlight their strong digital experiences, making themselves a trusted source for younger generations.
Understanding young Aussies’ new financial attitudes and shifting behaviour is critical for financial service institutions if they want to acquire this market now and in the future. Understanding why this group is being more cautious with their spending, for example, helps banks recognise young Aussies’ financial beliefs, behaviours, and fears, and may also improve their financial literacy.
Australians across the country have been adapting to unprecedented change over the past year. Right now financial brands can help young Aussies improve their financial well-being by navigating them through financial decision-making processes. And by understanding these critical insights into the ways young Aussies want to work with their own personal finances, brands will build trust and engagement with this next generation across the physical and digital landscape, leading to a stronger brand presence and better business results.