What does Gen Y want? Well, where can I start… They operate differently than any other generation: they’re technologically savvy, used to getting what they want and getting it now, connected to friends and family through cell phones and social networking sites almost all the time.

To target this group with specific (and often fickle) needs, PNC introduced its Virtual Wallet account in mid-2008, followed by the Virtual Wallet Student Account a year later. The company reports that the account has been a success, attracting 30,000 new customers in 2008, 60% of which are new to PNC. In addition, these virtual accounts have higher balances and better retention than traditional accounts.

A way to win Gen Y customers
The product portfolio is actually three accounts in one, which allows customers to direct money into different buckets labeled spend, reserve and grow. This is then enhanced by a personal finance tool. The product was built based on research as to how young people compartmentalize money in their minds.

Changing the online banking experience
The account works differently from traditional online banking tools, mainly because focus groups indicated that Generation Y feels that most banking sites are “clunky.” Instead of transferring money the traditional way, customers can drag money from account to account on one screen. Instead of presenting information in a traditional ledger format, customers view things on a calendar. The displays estimate future cash flow based on when customers are paid, when they pay bills, and on their spending habits. Customers can also set various saving rules with a feature called “Savings Engine.” All in all, the product is uniquely designed to respond to exactly what and how Gen Y wants to bank.

Marketing support
The company uses direct mail, email and print to promote the Virtual Wallet. One email targets existing customers aged 18-25, stating, “What are you waiting for? Go for the upgrade!” In direct mail, the account is marketed as a “high-definition online view of your money where you can pay bills, plan for monthly expenses, and save for the future.” Print ads go into more detail about the account and the features that make it different from a traditional account.

Looking forward
PNC stated that the cost of the project was $15 million and it expects to break even in two years. The company was smart to also release Virtual Wallet Student, since it allows the student to move right into the young adult version of the account. This helps ensure that PNC retains customers as they move into different life stages and need more financial products. Mintel Comperemedia expects other innovative products, targeted to specific demographic segments, to launch in 2010.

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