Banking on the Facebook Generation?
Experian study reveals social media’s risks and opportunities for financial providers
Central Birmingham has highest concentration of the Facebook Generation
17 August 2011, London, UK – A report from Experian® published today sheds new light on the financial habits of the UK’s young adults . Defined by Experian as ‘The Facebook Generation’, this group of über-savvy 18 – 25 year olds have taken social media and its ideologies into adulthood, influencing how they deal with financial services companies, while six out of ten admit to relying on friends and family for financial advice.
The Facebook Generation uncovered
Exclusive analysis from Experian reveals that this increasingly powerful group is typically found living in or around university cities, with central Birmingham pinpointed as The Facebook Generation’s capital.
Areas with the highest concentration of the Facebook Generation (Source: Experian)
Rank |
Area |
Penetration |
Rank |
Area |
Penetration |
1. |
Birmingham - Central |
23.8% |
11. |
East Ham |
16.7% |
2. |
Leeds - Central |
21.8% |
12. |
Nottingham - Central |
16.6% |
3. |
Manchester - Central |
21.7% |
13. |
Cambridge - Central |
16.4% |
4. |
Hatfield |
20.2% |
14. |
Coventry |
16.3% |
5. |
Durham |
19.6% |
15. |
Oxford |
16.3% |
6. |
Sheffield - Central |
19.1% |
16. |
Southampton - Central |
16.1% |
7. |
Liverpool - Central |
18.4% |
17. |
Glasgow - Central |
16.0% |
8. |
Cardiff |
17.2% |
18. |
Lancaster |
15.8% |
9. |
Loughborough |
17.1% |
19. |
Portsmouth - Central |
15.8% |
10. |
London - West End |
17.0% |
20. |
Birmingham - Kings Heath |
15.7% |
Based on Experian’s analysis, as the name suggests, social media is second nature to the Facebook Generation and they are 14% more likely to use Facebook than the average UK internet user. With an average household income of £19,131, The Facebook Generation are in their first job, some even having their first foot on the property ladder. As detailed in Experian’s ‘Banking on the Facebook Generation’ report, only a few in this group have a car and most do without. Extensive users of mobile phones and technology, the group’s overriding characteristic is its appetite to always find the best financial deal, from insurance through to credit cards and mortgages.
Tor Bengtsson, Commercial Director at Experian UK & Ireland, said: “The social media phenomenon has revolutionised young adults’ attitudes towards financial services. Lenders need a deep understanding of how these customers are interacting around their brands online if they want to succeed in this area of the market. It’s also critical that organizations realise that social media is the norm for this age group and the habits they’ve formed and expectations they’ve come to expect will inform decisions throughout their entire lives. Social as a way of life won’t just disappear when they get older and it’s only likely to get stronger.”
“Our report shows that The Facebook Generation has fundamentally different expectations around how they should be served by banks and other financial services providers. Social media makes young adults better informed, more able to share grievances and more open to influence from peers and financial providers than ever before. They want immediate information, instant decisions, faultless customer service and the ability to manage finances on the move. Providers that fail to tick all these boxes could fall behind.”
Financial requirements
Interest in financial services from The Facebook Generation should not be underestimated, according to survey data from YouGov. A total of 64 per cent had applied for credit in the last two years* and penetration levels for current accounts (94 per cent) and overdrafts (54 per cent) are broadly in line with that of the overall adult population.
However, credit card penetration (59 per cent versus 78 per cent for all adults), mortgages (21 per cent versus 38 per cent) and savings (50 per cent versus 65 per cent) are substantially lower than the rest of the adult population.
The Facebook Generation in statistics (Source: Experian & YouGov)
Measure |
Facebook Generation |
All UK Adults |
Applied for credit in last two years |
64% |
47% |
Hold a current account |
94% |
95% |
Have an authorised overdraft facility |
72% |
76% |
Using their authorised overdraft facility |
54% |
34% |
Go overdrawn at least once a month |
27% |
15% |
Hold a credit card |
59% |
78% |
Hold a mortgage on current residence |
21% |
38% |
Have savings account with bank / building society |
50% |
65% |
Have a cash ISA |
42% |
51% |
Faced with a financial decision? The Facebook Generation turns to friends and family.
Experian’s research shows that 58 percent of The Facebook Generation turn to their family and friends as their main source of financial advice (compared to national average of 36 per cent). With social media making the influence of peers all the more powerful, Experian’s report explains how it is crucial for lenders to fully understand social media and how consumers interact with others within this channel. Interestingly, only 18 percent said they consulted their bank or building society for advice, highlighting that with further engagement, lenders have an opportunity to cross sell additional products and services to existing customers.
Ankur Shah, co-founder of Techlightenment, an Experian company that develops social media technology to help brands understand, acquire and keep customers, comments: “With Facebook accounting for one in every six web pages viewed, financial services organisations need to use the unique insight capabilities of social media to create a robust digital strategy that identifies customer needs so they can reach their audience with the right messages at the right time."
Financial Strategy Segments is a person and household level segmentation which provides an unrivalled depth of insight into the financial behaviours of UK consumers. It classifies all adults in the United Kingdom into 14 household level groups (A–N) and 50 household level types (which are then further split into 93 person level types). Financial Strategy Segments has been built with the latest available data to reflect changes in behaviour during the economic downturn, supporting the targeting of products and services that are relevant to the consumer’s needs. These are distinct financial lifestyle types which comprehensively describe the underlying factors which influence consumer behaviour, such as typical financial product holdings, behaviour and future intentions, as well as summarising their key socio-economic and demographic characteristics.
Sources of data used to describe individual financial circumstances include income, outstanding mortgage, unsecured debt, credit balances, investments and property assets. FSS also takes into account individual consumer attitudes towards financial products such as channel choice when researching, purchasing and managing personal financial products. It also includes people’s likely loyalty, switching behaviour and general attitudes towards credit.
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com