Despite the size and importance of the Millennial segment, traditional banking organizations still aren't providing the experience expected.
When it comes to the Millennial segment (those born between 1980 and 1996), financial marketers shouldn’t believe everything they hear. Along with several important truths, there are many long standing myths that can negatively impact the effectiveness of marketing initiatives to Millennials.
There is no arguing that the Millennial customer base is growing and will soon be more important than any previous generation. It is also true that Millennials are highly mobile, technically savvy and open to new ways to conduct their banking.
On the other hand, Millennials don’t differ as much as many marketers believe in their use of banking services. In addition, because the early Millennials are reaching their prime, this segment provides significantly more immediate opportunity than most marketers realize.
To engage Millennials and invest in this expanding customer group, bank and credit union leaders must sort the myths from the facts, and take action based on empirical data. A great source of insight is the Digital Banking Report from The Millennial Mind.
This 63-page report includes 43 charts and will assist organizations in understanding the key beliefs, behaviors, trends and priorities related to the Millennial segment. The report also provides analysis of how banks and credit unions can market to and deliver the desired experience to the Millennial consumer.
The key questions the research report addresses include:
- What is the size of the Millennial market and what are the different sub-segments?
- What is the demographic make-up of the Millennial market?
- What are the attitudes of Millennials about money and finance?
- What are the current products and services used by the Millennial market?
- How do Millennials prefer to make payments?
- What delivery channels do Millennials use?
- What is the Millennial segment attitude towards new financial services providers (fintech firms)?
- What’s the best way to reach the Millennial segment?
Below are some highlights of the report.
All Millennials Aren’t Created Equal
The Millennial generation is the largest in history, with more spending power and technical acumen than any generation before it. The Millennial generation continues to grow as young immigrants expand its ranks at a faster rate than other generations. Because they grew up with digital technology and a phone in their hand, Millennials shop and make buying decisions differently.
But not all Millennials are alike.
The younger spectrum of the Millennial segment has greater financial provider attrition than older Millennials, which is not unusual since younger consumers are more transient and more demanding and unforgiving than other consumer segments. The younger Millennials are also more likely to chose mobile as opposed to using a desktop as a channel of interaction with their financial institution.
Young Millennials (age 18-21) and Mature Millennials (age 26-30) are the most open to non-traditional modes of payment. Specifically, Mature Millennials are more likely to use mobile wallet and mobile money, while Young Millennials prefer peer to-peer payment platforms such as Venmo and alternative payment providers such as Paypal.
Financial Behavior of Millennials
As Millennials take on increasingly complex financial lives, the ways in which they interact with their banking providers will change as well. Most financial needs/behaviors are driven by the stage of life that a consumer is currently in. The financial needs of a Millennial that is 29 years old are not significantly different than those of a Baby Boomer when they were 29 years old.
Both Millennials and Baby Boomers were/are concerned with accumulation — first home, borrowing for big ticket items, starting to save for the future, and convenience in every day transacting to assist with hectic schedules of work, new families, and busy social lives. The real differences between the Millennial age 29 and a Boomer at age 29 is the communication (both tone, frequency, and media), and the technologies used to meet the consumer’s financial needs.
Perhaps surprisingly, according to Gallup, Millennials have a higher share of wallet with their primary bank than any other generation. And when banks or credit unions engage Millennials, they gain a boost in wallet share of as much as 25% or more.
Financial marketers who believe that Millennials’ assets are too low to invest in dialogue are relying on a faulty assertion. While many Millennials are struggling with student debt and may be delaying major purchases or life decisions, the truth is that millennials have a lot to offer financially.