By Andrew Deen, Independent Consultant
Millennials have experienced one of the worst recessions in history, giving them different financial values than previous generations. Financial institutions need to vary the way they approach younger clientele who have become distrustful of banks. For example, more than one third of millennials have never owned a credit card.
They also have different saving cultures compared to baby boomers. Millennial investors hold more than half of their portfolio in cash with only 38 percent going into stocks while boomers held only 23 percent of their portfolio in cash and 46 percent going into stocks.
Millennials talk more openly about money and want to save more for the future. Keep in mind that many would rather pay for experiences than material items.
Dual Priorities: Paying of Student Loans, Saving
Millennials have two main priorities when searching for a financial institution. They want to pay off student loans and other debt and save for the future. On average, millennials spend 43 percent of their income paying down debt and they put away 38 percent in savings for the future. They want their bank to be like a partner and understand them, meaning financial institutions need to tailor their products to this younger generation’s needs as well as loosen up on some of the stricter terms and conditions.
Ohio University Online
More than 80 percent of millennials own a smartphone, making it no surprise that millennials are tech-driven and want their banks to be mobile- and web-friendly. Interestingly enough, they are one and a half times more likely to discuss their finances online than in person. In fact, 87 percent of millennials will seek financial thought leadership through at least one social media network.
Now that you know more about their spending habits and financial preferences, here are a few tips to help connect with millennials. Financial institutions should have a mobile app where millennials can access your services or at the very least a mobile friendly website. Millennials enjoy visual information, so use photos, videos or infographics to express your values. Banks will also want to give their credit products a makeover and align them to millennials’ needs.
Millennials choose brands carefully, so give them rewards for their loyalty. Banks should provide financial advising that provides millennials with a service as well as educational lessons that focus on their needs. It’s always helpful to provide personalized communication to help millennials feel like they are understood.
A mutually beneficial relationship between financial institutions and the millennial generation will keep either side from feeling like they’re getting a raw deal. To learn more about how to attract millennials to your financial institution check out the infographic above created by Ohio University’s Online Master of Financial Economics program.
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up businesses. Follow him @AndrewDeen14.
In Viewpoints, payments technology professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.