Technology-Savvy Generation X Called Perfect Market for Banks

NASHVILLE - Lazy. Apolitical. Short of cash. That's the conventional wisdom about Generation X.

While sneaker, jeans, and soda marketing executives may know better, bankers have been slow to direct marketing efforts at this prickly group.

However, Generation Xers may be just the market for banks, which rely increasingly on electronic transactions to keep people out of branches.

"ATMs are just fine with this crowd. So is banking by computer and banking by telephone," said Karen Ritchie, the executive vice president and managing director of Detroit-based General Motors Media Works. "They are unquestionably the market of the future."

Speaking at the Bank Marketing Association's annual forum, held here last week, Ms. Ritchie said Generation Xers are concerned about their IRAs, while at the same age baby boomers were worrying about Bob Dylan's decision to go electric.

She said, too, that they are more serious about their work and about saving money.

"With them, there is none of this working on a commune in New Mexico or hanging around Haight-Asbury," she told an audience of about 500 marketing executives. "They're really out working."

Defined as those aged 14 to 34, Generation X can claim some 80 million members. That, she said, is about 10 million more than the baby boom. About 60% of Generation Xers have at least a high school diploma, making it the best-educated generation in history, and many others are still in high school.

And they save, in part by living with their parents longer, Ms. Ritchie said.

"This is the group of people I would like to sell a car to. I suggest you lend them the money," she added.

Bank analysts agreed with her assessment. "The Generation Xers will be borrowers," said Fred A. Cummings of McDonald & Company Securities Inc. in Cleveland. "That's where a lot of growth will come from."

"We clearly think that's an important segment," said Keycorp direct marketing whiz Stephen A. Cone. The Cleveland-based bank is one of the few making a special effort to win over this young market.

Most banks prefer to target wealthier baby boomers and retirees.

"Most banks are internally focused on their own customer base - on improving the profitability of existing customers," said Mr. Cummings. "Maybe that will change."

According to Ms. Ritchie, that kind of change would make sense. Because Generation Xers grew up with computers, they have an affinity for electronic products and are technologically more sophisticated.

"Their facileness with personal computers is something we view as a positive," said Mr. Cone. "We're trying to make sure our electronic channels are more visual. We know that is important to them. It is something they care about."

What's more, members of Generation X are trendsetters. The conventional wisdom that baby boomers are solely responsible for what's in fashion is outdated, Ms. Ritchie said.

"How many potential customers do you plan to offend by ignoring them?" she asked. "If you think the sun rises and sets with the baby boomers, you've got another think coming."

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