Gen-X and Gen-Y Managing Finances via Online Social Networks
It’s not news that younger generations have ventured where no other past generations have gone before when it comes to use of technology in everyday life. Facebook, MySpace, YouTube, Second Life, and other online destinations have morphed into bonafide social venues that are a part of the day-to-day lives of most teens and young adults. So much so, that academics and industry followers have become increasingly eager to understand.
On March 30, 2006, during the birth of growing mainstream attention and popularity for online social networks, CNN’s Bill O’Reilly invited Danah Boyd, a renowned expert and anthropologist to offer her opinion regarding controversial news coverage about the popular website MySpace. Boyd gave insight into the cultural reasons that are at the root of why people have turned to the Internet for socializing. Archived video of the interview is found on YouTube. Paraphrasing Danah Boyd:
…users are online in order to connect with people whom they are already acquainted with, often times through school or any other venue where there is regular contact aside from the Internet sites they have in common. The online generation uses technology in order to be in contact with their peers, despite the fact that they cannot be in the same physical space at that given time.
Subsequently, Danah Boyd has further distinguished herself as an expert and received national media attention from NPR, New York Times, Financial Times, Newsweek and numerous other traditional media outlets.
Boyd addressed an audience at the 2007 Cannes Film Festival Opening Forum, speaking about “The Audiences of Tomorrow,” and she reiterated this same point:
Sites like MySpace serve as ‘networked publics…’ Although adults emphasize ‘networking,’ most teens are simply communicating with the people that they know from school, church, and extracurricular activities. What they are doing on MySpace parallels what most of us did when we gathered in parks, malls, parking lots, cafes, and other public places.
A PhD candidate at the School of Information (iSchool) at the University of California (Berkeley) and a Fellow at the Annenberg Center for Communication, she “examines how American teenagers socialize in networked publics like MySpace, Facebook, YouTube, and others” with the credentials of a dedicated academic. Her view that the newest generation of online users is a culture unto itself is most appropriate. She has detailed information regarding new media, found online at http://www.danah.org/.
On the other side of the coin, industry trends point to the beginnings of the social networking phenomenon starting to evolve into a pragmatic means for users to fulfill basic needs. According to the 2006 Financial Times Article, “The High Priestess of Internet” that featured Danah Boyd:
Social networks are likely to change the way we present ourselves. It may become a matter of course to have an online public web page where people we want to deal with will turn to find out more about us, in the same way that having a telephone number or e-mail address is routine today. Otherwise we will not exist. We will be part of a network with links to trusted figures and recommendations and testimonials that bear out our claims about who we say we are. I will declare who I am by the people I am holding hands with on my network.
In 2008, we can see how insightful the article was. Online users who are Gen-X and Gen-Y are using networked publics as a means for making recommendations and seeking testimonials on products and brand names. In this regard, managing personal finances is at the top of the hierarchy of needs that Gen-X and Gen-Y consumers are flocking to the Internet to fulfill.
Personal Finance websites that are growing in popularity include Mint, Wesabe, and Geezeo. All of these sites are free to use, at no cost to consumer, and similar to a basic social networking forum. However the important difference is that they are functional for those who are looking to connect with peers that have financial issues and goals in common. It is essentially, a hybrid of social networking with the ability to track personal finances based on the account information that is uploaded from the user.
These virtual venues are resources that allow users to offer support, in a way similar to how one might ask their peers for advice face-to-face, aside from being online. Such social networking websites as these are independent from the banking industry, as far as the services that they offer. However, representatives from the banking industry are following suit, in order to connect with consumers to offer their services and advice in a forum where the effort is welcome.
Names of the online user groups within these websites reflect the financial goals that participants have in common. Some examples of popular groups within these websites that a user can join would be “Paying It Off,” “Smart Banking,” “Buying a Home,” etc.
See the following examples of some typical posts that lead into discussion threads from the “Paying It Off” group on Wesabe’s website:
…discussion titled ‘Mortgage or credit cards??’
“We are pondering which to keep; the house/mortgage or pay off the credit card debt? We would be upside down in the mortgage…”
…discussion titled ‘How to pay my cards?’
“I just borrowed $2,000 from my parents telling them I need to pay off my card debt (about $6,000+) which is really affecting my Credit Score (600 now). How do I pay? Should I pay the one with highest APR (17%, Capital One Visa which I owe $700+) or spread it among the other cards just enough to show that there’s lesser amount I owe from all the cards? My goal is to be able to raise my Credit Score so I can either apply for a personal loan to pay off the debts totally or request for a 0% Balance Transfer from one of my Credit Cards/ Banks. By the way, I issued my parents checks to pay off what I owe them at $200/month. Payment begins end of this month. Your comments would be highly appreciated. Thanks.”
Posts like these are not uncommon, and advice is not only offered from peers but it also comes from credible experts who are also subscribing to the site, people who work within the finance industry. Even the national media outlets are getting involved, having their reporters monitor sentiments of users, and using some of their experiences for leads and story ideas. See the following post from a representative for a USA Today news reporter:
…discussion titled ‘Hit by an overdraft fee for a PENDING transaction?’
“A USA TODAY reporter is looking to talk to consumers who have been hit by overdraft fees for transactions that are PENDING, but have not yet cleared. It used to be that if you used your debit card, and signed for the purchase – rather than entered a PIN – the transaction would take a few days to clear. If you didn’t have enough money in your account, you could deposit money before the transaction cleared in order to avoid a fee. But now, a number of major banks are hitting you with this fee if you don’t have money in your account at the time you sign for the debit card purchase – even if the transaction doesn’t clear for a few days.
If you’d be willing to share your story, please send your contact information to me at XXXXXX@wesabe.com and I’ll pass it on to the reporter.
She’s on a tight deadline, so the sooner the better! Thanks so much in advance – this is a great way to share your story and to shed some light on these not-so-savory overdraft policies.”
According to NetBanker.com, a website that reports on online finance trends, one notable retail bank recently began taking on this trend within their own online offering. The appeal with these specific types of websites geared toward social networking and personal finances is based upon features like mobile functionality, online customer support, and social aspects. All of these factors have mass-appeal with the 20-something audience. How many more within the retail banking industry are willing to go this innovative route remains to be seen?
Continuing to observe trends and finding credible sources of information has always been one way to stay ahead of the curve. Slow progress on paying off debt Academic research findings are one place to look as opposed to following the popular media reports which may not paint an accurate picture. Social networking is still relatively new ground, but the fact is that youth today are growing up online. A report to that effect recently aired on the Public Broadcasting Station during an episode of “FRONTLINE: growing up online.” This Emmy-Award winning series chose to examine this culture in-depth, with relative accuracy.
Social networks are just one of many behavioral aspects within the culture of the established online generation. Therefore, it is evident that industry needs to integrate itself into this new cultural framework in order to engage Gen-X and Gen-Y.