Move over boomers. Move over Xers. There are new kids in town and they're positioned to have a major economic impact.
The nation's 18- to 25-year-olds, known as Generation Y, live at the forefront of a fast-paced world connected by technology.

They shop. They spend. They surf the Internet and pay bills through their cell phones.

Gen Yers number some 60 million people in the United States. By most estimates, that's nearly three times the size of their predecessors, Gen Xers. And it makes them the closest rival to the baby boomer generation, which numbers some 75 million people.

All this has marketing and consulting firms laboring to learn the secrets that will lure Gen Yers, and banks are doing a bit of their own research, too.

"Banks are really just starting to notice of how important this demographic is, and now the question is what are we going to do about it," said Steve Williams, a principal with the Arizona-based bank consulting firm Cornerstone Advisors.

George Hofheimer, director of research for Filene Research Institute, said several of his organization's studies show that banks and credit unions simply can't afford to ignore Generation Y.

"These are people who are heading into their prime borrowing years," he said. "It won't be long until they'll need home and auto loans."

Right now, "it's Gen Xers that offer the most loan revenue potential for banks and credit unions, but within a decade Gen Y is expected to surpass Gen X's potential," Hofheimer said.

"One of the biggest things for banks and credit unions to consider is how they're going to change their delivery requirements, because this generation doesn't want the same things others do," he said.

And that's what a number of banks are starting to do.

"A lot of what we've done focuses on convenience, on electronic access," said Chase bank spokeswoman Mary Jane Rogers.

Chase sends e-mail when funds are deposited, checks are cleared and whenever an account is accessed for security purposes.

"That technology is appealing for everyone, but especially to the more tech-savvy user, which is what that generation is all about," Rogers said.

A focus on Internet services may be well warranted.

Of 18- to 24-year-olds in the United States, 82 percent use the Internet every day, according to a 2005 Pew Internet and American Life Project study about teen and adult online habits.

That figure jumps to 85 percent with 25- to 29-year-olds.

Some analysts say the Internet is only the first step to attracting Gen Y and that financial institutions need to find a way to hook them while they're young and hope they remain faithful as the generation grows older. A 2003 study by the Boston-based financial services consulting firm Celent shows that attracting college students is the most effective way to target Generation Y.

Information like that led Wachovia to partner with the University of North Carolina to build an on-campus branch and issue identity cards to students that double as ATM cards.

Other banks have begun to follow Wachovia's lead, but few credit unions have made the move to attract college students, until recently.

This month Ent Federal Credit Union announced plans to partner with the University of Colorado at Colorado Springs. The credit union also plans to build an on-campus service center and issue multi-use credit cards.

"We're seeing the average age of our membership get older and older," said Jim Moore, Ent's senior vice president for corporate development.

The average age of credit union members across the nation is 47, according to the Filene Research Institute.

"If you follow that to its logical conclusion, we could be out of business in a few decades if we don't attract a younger generation," Moore said.

Financial institutions are employing slick marketing tactics in an attempt to speak the same language as 18- to 25-year-olds.

For example, the Filene Institute produced the COOL "an acronym for custom-fit, online, outrageous and loyal" solutions study to provide training and service materials to financial institutions that can be used to engage the younger generation.

But, Hofheimer warned that "hip" marketing tactics need to be approached carefully.

"If they're not careful, commercials and promotional materials can come across as cheesy," he said. "Most generations are pretty good at noticing when the older generation is trying to use their language to appeal to them."

One successful tool used for attracting young people is Brass magazine, a glossy paged publication that features young, financially successful 18- to 25-year-olds in a youthful, loud format.

Twenty-three-year-old Brian Simms said he started the magazine because he saw a gap between what the financial world was offering and what his generation needed.

"In order to be in the game you have to offer something that people can genuinely relate to, and it has to be reputable," he said.

Sims also talks to credit union and bank presidents about Gen. Y attraction.

Sims, who partnered with Ent for a recent Brass feature, said the Colorado Springs credit union has done particularly well at making attempts to attract younger members.

Moore said Ent's partnership with UCCS is a big step in that direction.

"This will really give us the opportunity to engage with the folks that we want to become our future members," he said.

Rob.Larimer @ csbj.com