No doubt you’re familiar with the Millennial generation. With 80 million members the Millennials are the largest generation in American history. And they’re everywhere. You may even have one living in your basement.
As a Millennial myself, I can agree that my generation has a completely different expectation than our Gen X and Baby Boomer predecessors when it comes to money and investing. This, combined with the mere size of this group, means financial institutions need to adopt an adapt or perish mentality if they want to benefit from the Millennials’ massive economic footprint ($200 billion to be exact).
Here are 3 things financial firms need to know about Millennials.
1.Technology is such an integral part of their lives that they don’t just see it as a tool, they see it as a part of themselves.
The Millennial generation is defined by technology. As the first generation to be born into a tech infused world, they grew up on computers, tablets, and smartphones. Mobile is their tech of choice with 18% of them using a mobile device as their only internet source (compared to 5% of Generation X and 3% of Baby Boomers).
Using their mobile devices for socializing, entertainment, shopping, and managing their finances, Millennials expect a mobile friendly customer experience. 51% of Millennials say their brokerage firm’s mobile capabilities were extremely important to them (versus 36% of Gen X-ers and 19% of Baby Boomers). Millennials make up 43% of all mobile banking and finance usage.
According to a study conducted by Corporate Insight:
Millennials truly are the “Mobile-First” generation. Financial services firms must deliver an excellent mobile experience if they want to compete for Generation Y customers. At the most basic level, this means supporting both Android and iOS devices and offering cutting edge resources for both existing and prospective clients.
2. Millennials are extremely distrusting of financial institutions.
Can you blame us? The economic crisis in ’08 and the subsequent Wall Street bailout have made Millennials very cynical when it comes to big banks and financial firms. This pessimism is heavily reflected in the research.
A 3 year study conducted by the Viacom group Scratch shows that over 65% of Millennials would rather visit a dentist than hear what their bank has to say. Most believe that startups are positioned to overhaul finance. In fact, a third of Millennials think that they won’t need a bank at all and over two-thirds claim to be more excited about a new offering in financial services from a tech company such as Google or Apple than from their nationwide bank. Additionally, research conducted by the Pew Research Center reveals that less than a third of Millennials believe they will save enough money for retirement, far fewer than any other generation.
The best way to repair this relationship is through education and understanding.
3. Millennials want to be educated.
Surveys indicate that Millennials don’t feel confident about managing their finances or making investment decisions.
By using the power of technology to educate, financial institutions become a helpful resource for young investors and can lay the foundation for a trusting relationship. According to the Corporate Insight study:
When it comes to Millennials, the retail brokerage industry faces perhaps the biggest challenge of any financial services industry segment. Saddled by billions in college debt and widespread under-employment, most young adults are not concerned with playing the financial markets – they’re focused on just getting by. As one market researcher we interviewed put it, ‘Millennials look for things that will make them happy right now. They feel that nothing is truly certain when it comes to their finances.’
60% of Millennial investors feel it’s “very” or “extremely important” that financial institutions provide content that will teach them the basics of investing and 70% express regret that they didn’t learn the basics about finances and investing in school.
And don’t think that static content that relies on stats and calculators will cut it. Millennials want to be engaged. They want interactive, dynamic content that speaks to them. Their opinion of a business or service hinges on their online experience. In fact, 57% are very likely to abandon an online purchase if their questions aren’t answered quickly enough.
Millennials support companies that are invested in improving their customers’ lives. They seek out thought leadership and expertise, especially in areas where they lack experience. Millennials are 44% more likely to trust experts than other generations. By providing dynamic, educational content that showcases your industry expertise, you’re on the path to a very happy and successful relationship with your Millennial customers.