Many banks are struggling with how to create an online experience that resonates with Generation Y, builds trust, delivers useful financial products and services and does not alienate older customers. "Gen Y cares about the experience, it's really all about the experience," says Geoff Knapp, vp of online banking and consumer insights at Fiserv. "Most banks are in a bit of a quandary. They don't want to create an environment so tailored to Gen Y that it puts off the Baby Boomers."

Given that it takes 15 average Gen Y customers to generate the profits of one average Baby Boomer, according to Aite senior analyst Ron Shevlin, this is no minor consideration for banks. Brussels-based Dexia Bank is trying to do satisfy both groups. It created a whole separate bank, Axion, exclusively to serve customers aged 12-24. Jeffrey Pilcher, a consultant and publisher of The Financial, says this bank is much more than a "reskinned bank with a lifestyle veneer." Axion is a bank within a bank that offers unique products, promotions and educational resources targeted to a narrow segment and marketed under a separate standalone bank brand.

For example, last year the bank launched the Youth Dexia Index modeled after the Consumer Index. Instead of the basket of standard costs including rent, fuel, shoes and meat, the Youth Dexia Index includes categories such as recreation and culture (e.g., cinemas, nightclubs), food and drink, fashion, communications (e.g., mobile phones, subscription) and hospitality. The idea is for young consumers to measure and understand their own purchasing power and then manage their money better; meanwhile, the bank uses the index to create benefits that resonate with customers. Last summer after the index revealed that music festival entrance fees had increased 11 percent, Axion created the Dexia Ticket Shop, which offered discounted tickets. The bank also set up booths at the festivals where people could win food and drink vouchers.

Young people's love of music also inspired Axion to create a promotional campaign with the help of ad agency Boondoggle. A jury of professional musicians selected 25 acts based on original demos. Each of these bands performed on a specially formatted soundstage that could be adapted to fit into the banner ad space at the top of the typical Web page. The filmed concerts were then streamed onto popular Gen Y Websites. The public could vote on their favorite band and the winner performed live at Ancienne Belgique, one of Belgium's oldest concert halls.

"I'm speechless about how phenomenally brilliant this concept is and I'm shocked that no other industry is ripping it off yet," says Pilcher. "You can talk about Twitter until you're blue in the face and you'll get, what, 850 followers. These concerts had 6.8 million banner impressions." Almost 45,000 people visited the campaign's microsite and more than 7,500 voted.

In a statement, Axion says that "Dexia, via Axion, supports youngsters between the ages of 12 and 25 in all aspects of their lives-financial and non financial-but in a way which is meaningful to them. We know that music is a very big part of life for this age group and we know that a lot of them play music themselves. So we thought it would be a good idea to, on the one hand, give them a platform to express themselves, and on the other hand help them financially."

Though intrigued by Axion's business plan, Pilcher says that U.S. banks must be careful about overreach. "Launching a sub-brand can be a powerful tool if the main brand doesn't line up with the target audience. But you are managing two brands. That takes time, energy and resources."

Ron Shevlin, a senior analyst at Aite, is less convinced that a standalone bank for Gen Y is the right strategy for banks. Besides the fact that many banks in the U.S. need to repair brands hurt by the financial crisis, many Gen Y preferences overlap with other age groups. "I don't see the need to do this in the U.S. as a separate branding approach, especially given the need to build trust in the parent brand. Banks should be developing products and services for Gen Y, but I'm not so sure they're so different from others." He argues the three key ways to win Gen Y customers is to offer easy-to-use personal financial management tools (PFM), a quality rewards program, and a robust mobile platform. Some or all three of these would also appeal to older customers, he says.

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