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Millennials and Money – Are they Maligned or Misunderstood?

Contrary to popular belief, the millennial generation is not lazy, entitled or narcissistic.  They are a robust group of entrepreneurial, socially astute and media savvy consumers.  They make discerning decisions about their money and are thoughtful about the companies they trust.

Last week I chaired a conference titled:  Millennials and Money.  We discussed similarities and differences between the baby boomer and millennial generations, we talked about what millennials want and don’t want from financial services, and tossed around as many statistics as humanly possible.

I walked away with a few “Aha’s” as well as a greater appreciation for the long lasting impact they will have on the payments ecosystem.  I believe that millennials are helping financial services companies rethink HOW to offer products and services – WHAT to offer, and WHERE to offer them.  Ultimately all users will benefit.


The Unique Millennial Experience

Currently between the ages of 18-34, Millennials have had a set of unique experiences that will reshape expectations for companies that want to do business with them, from clothing designers to car manufacturers, from shopping and payment apps to saving and investing options.

Yes, they face more headwinds than the previous baby boom generation, but it doesn’t mean they don’t want or need financial services products for the same purposes.  They just look at the world a bit differently because they are:

  • The largest demographic group in history with over 75MM people (US Census Bureau, Pew Research), representing 25% of the US population*
  • 43% are non-white, making them the MOST DIVERSIFIED ethnic group in history (US Census, Pew)
  • And by 2020, they will represent 50% of the workforce, despite having entered it after the worst recession in US history
  • They are burdened with $1.3 trillion in student debt
  • And though, having postponed home ownership and marriage, are now moving into the most expansive economic period of their lives – representing approximately $1.7 trillion in buying power (CEB Global)
  • According to Gallup, they also spend more on rent/mortgage (40% vs. 29%) and leisure activities (33% vs. 22%) compared to all other groups

We all know that millennials have “grown up” with technology and that approximately 85% own a smart phone. We fondly call the entire millennial group digitally native.  I would suggest, however, that there are two groups within the millennial segment, and that there is a divide between those that truly grew up with technology broadly in their lives to those that learned to use it as they moved into young adulthood.

After all, the iPhone wasn’t even invented until 2007.

And now, millennial entrepreneurs, or “millennipreneurs” (coined by a 2016 Global Entrepreneur Report from BNP Paribas) have launched about twice as many businesses as baby boomers.** I, for one, am happy to have the millennial generation lead the way towards innovative solutions that bring me value, whether it’s done by leveraging new technology or reinterpreting stale business models.

Perhaps more importantly to those of us in the world of payments:

  • In 2015: 52% used a banking app and 72% used it several times per week
  • 43% of millennials have used non-bank borrowing compared to 20% for the general population, and
  • By 2020, 40% of 1099 incomes will be from millennials

Also just in from MFour Mobile Research’s Millennial Insights Project:

  • 61% PREFER to bank with mobile apps
  • Only 18% of millennials prefer to bank in person; however 64% said they visited a bank within the past month
  • Almost 83% used a mobile banking app during the past month
  • The groups most likely to make mobile banking their first choice were Hispanics (71.1%), and millennials with incomes of $75,000 or more (65.5%)

What I learned last week was that financial services companies, traditional and non-traditional, are all working hard to meet millennials where they are – online and within the context of social/digital channels.  In fact, did you know that 5 out of 6 millennials connect with companies via social media? Or that 95% trust their friends and peers more than corporate advertising?

Resonant Themes

We talked a fair amount about trust and trustworthiness and about being authentic which really translates to being transparent – about your product, about fees, about your people and your company.  Common themes at the conference can be summed up with several quotes from speakers and attendees:

  • “Bet on Trust”
  • “Meet them where they are”
  • “They live in networks, not corridors”
  • “They want to make sure they are making the right decisions”
  • “Building a brand is more than a product”
  • “Millennials may have initial distrust with banks, but once proven, will give you their business”
  • “In exchange for personal information, they expect value”

Product Ideas for Millennials

Both incumbent financial services firms and start up entities at the conference were delivering new products, using new channels and focusing on creative ways to capture this large and self-reliant group of adults. Here are some examples:

  • A Fortune 500 firm developed partnerships with Viber and WeChat to integrate money transfers in a new context (“meet them where they are”);
  • A top 10 issuer talked about when to use “gamification” techniques, as well as how de-stressing decisions about money is so important to the millennial customer (“helping them make the right decisions”);
  • A community banker shared the dual importance of mobile technology for everyday business and on-site customer care for those bigger transactions (“Meet them where they are”, “help them make the right decisions at the time they need help”)
  • Several cited Venmo as a social sharing ecosystem to emulate (“they live in networks”)
  • One B2B company quickly realized their clients’ customers were the 1099 / “gig” economy workers and introduced a loyalty program (“building trust keeps them in the fold”)
  • A start-up investing firm integrates cause marketing as part of its product offering and also donates a % of company revenues (“building a brand is more than a product”)
  • Another start-up investing firm started off with a “pay what you believe is fair” approach, stating that over 90% of customers paid a fee in that first year (“bet on trust”)
  • And lastly, we heard from a personal financial manager (PFM) outfit that positions itself as the FitBit for financial health because its resonates with millenials (“exchange of personal information for value”).

Here at Glenbrook, I am working with another start-up company founded by Millennials for Millennials – using intuitive design and data science to deliver credit cards to consumers who might not ordinarily receive one.

This is an exciting time to be in financial services.  New technology is providing a variety of ways to innovate financial platforms, mobilize money and democratize payments.  And the millennial experience is paving a new way forward and inspiring the rest of us to push the boundaries of what has been into what can be.

So, are Millennials misunderstood? Not to me.


*Other studies state 33% of the population, but all agree this is a large and an important generation

**Fortune Article February 20, 2016 “Millennipreneurs” Are Starting More Business, Targeting Higher Profits

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Ed Doran
Ed Doran
5 years ago

Good read. Thank you.