Finances are one of the last things Millennials worry about in their day-to-day lives, even when buying a house, starting a family and retirement savings loom on their horizons. One survey of 2,000 Millennials (people born between 1981 and 1996) found the generation would rather water plants than give their bank account some TLC.
The research, conducted by OnePoll and Upwise, also found Millennials are “more likely to play with pets, surf streaming services or ponder what to eat for dinner longer” than they would be to think about their finances. By comparison, three quarters of Gen Zers are frantic and stressed about their finances, according to a TIAA Financial Wellness Survey, even though they are just now reaching the brink of financial independence.
Meanwhile, the youngest Millennials are already several years into financial independence. They are also on the verge of inheriting $68 trillion from their Baby Boomer family members by 2030, according to Coldwell Banker Global Luxury. That is five times the wealth the generation holds today.
What does this all mean for banks and credit unions? A treasure trove of opportunity: mortgages, auto loans, savings accounts for their kid’s college and the list goes on.
How Much Millennials Will Inherit By 2030:
Sometimes it’s difficult for banks and credit unions to parse out exactly what Millennials want from their banking provider. To understand what Millennials think they need financially, advertising and marketing firm Banktastic works with nearly 250 Millennials and surveys them monthly.
One of the primary mistakes banks and credit unions make with Millennials is assuming the generation understands all the financial lingo banks throw at them, points out Martha Bartlett Piland, Founder and CEO of Banktastic.
“It’s easy for people in the industry to get really comfortable with the language they use,” Piland explains to The Financial Brand. “I know what a HELOC is, or an HSA, but a lot of times banks forget not everybody knows what they’re talking about. Before you can promote something, people have to know what on earth it even is.”
If they play their cards right, banks and credit unions can help Millennials take the next big financial steps in their customer journey. But, it will require a cultural shift from Gen Z and Baby Boomer marketing to programs built specifically with Millennials in mind.
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Design Marketing Campaigns For Millennials
Too often bank marketers build out their campaigns with older customers in mind. This is especially true with wealth management, where ads are set up for Baby Boomers. This won’t work with Millennials.
“There’s a perception among Millennials that ‘Gosh, I’ve still got all these student loans. I don’t have anything to invest,'” says Piland. “A lot of the marketing from financial advisors looks like it’s targeted to older people, so Millennials will say ‘it doesn’t even look like it’s for me.'”
Grabbing the attention of Millennials could be as simple as changing the photos and other visuals that banks and credit unions already use in their marketing.
“The stereotypical wealth management ad is that gray-haired couple on a motorcycle. I don’t think that’s how a Millennial sees themselves,” Piland says. Banks need to pick some imagery that is more relatable.
Two Deloitte researchers — Managing Director Rob Berini and Senior Manager Ketan Parakh — found Millennials are less focused on particular banking products or services and more on their immediate needs. “Banks should think about users, uses, and usage of banking products in the context of serving those motivations and aspirations and uncovering new value,” the two wrote in a blog post.
Rethink Millennial Marketing:
Millennials don’t want to have to figure out banking products — they want banks to figure out their needs and offer products that match.
Unlike Gen Z, monitoring their finances is the last activity Millennials want to be doing. Yet, that doesn’t mean Millennials aren’t expressing a desire to understand how to invest and use their soon-to-be inherited cash to their advantage.
Deloitte interviewed several Millennials to learn more about what they are looking for from banks. One (Kavita D.) said her banking experience doesn’t make it easy to access the resources she needs to understand her finances.
“They’re there for me to talk to if I have any problems; because right now they’re kind of just holding my money,” Kavita said in reference to banks she uses. “They’re not really helping me do the work, and they’re not helping me to reach my goal. And there’s nothing really helpful that they’re doing to help me earn additional money.”
Millennials Want Tools From Banks, Not Fintechs
Another Millennial that Deloitte spoke with (Lili M.) said she would much prefer to work with her traditional banking provider than a fintech.
“If my bank had a tool that let me understand what my spending habits are and helped me figure out how much should go in my savings account per month to get to my goal, that’d be awesome!” Lili told Deloitte. “I’d trust it more than third party apps because it already has all my information and best shows my purchasing habits since it details everything I purchase.”
To shore up the connection between bank and customer, Deloitte recommends three specific financial products:
- Branded credit cards. 80% of all the financial interactions of the Millennials surveyed used credit cards. Many of these were issued by a brand, not traditional lenders, and they offered rewards.
- Rewards planning. “Participants regularly described detailed plans to maximize their points and cash back.”
- App-based payments. 15% of Millennial transactions used alternative payment methods (PayPal, Venmo, Apple Pay). Only 10% used cash or checks.
Deloitte also recommends that financial marketers avoid the “omnichannel approach” when targeting Millennial audiences.
“Omnichannel is a term born of the retail industry to describe bringing together distribution models that were built upon different inventory and infrastructure,” the researchers wrote. “As physical inventory gives way to digital and information products, the concept of ‘channels’ loses relevance.”
The researchers suggest replacing omnichannel with “post-channel” experiences, which Deloitte says is about “banks design[ing] customer experiences that are untethered from channel thinking.” That entails a financial institution focusing less on balancing physical and digital channels and pivot instead to CX that “better reflects human behaviors and preferences.”
Address Millennial’s Biggest Financial Concerns
Lastly, Deloitte suggests looking at Millennials through a more holistic lens. It starts with first addressing the generation’s instinctive money goals: to grow, to move, to store, to borrow and to protect.
Then from there, Millennials find financial products to sort out the jobs they need to get done: bill payments, immediate purchases, investments, provisions, shopping, mobility, taxes and indulgent purchases.
Only then do some of the big picture concepts come into view: the financial pressures and major life events. These life events are where Deloitte recommends banks and credit unions step in and offer curated financial products to help with these bigger moments. If Millennials are distracted by their immediate financial needs as mentioned above, offer them the services to meet those needs.
Diagrams like the one above could help a bank’s marketing team decipher Millennials. But, at the end of the day, Martha Piland insists it’s a mistake for banks and credit unions to look solely at financial data to learn about Millennial audiences — especially as the generation begins to lean on banking’s most substantial products.
“It’s valuable to have your own Millennial advisory board for your financial institution — you could have one in every market — where you can hear their voices, hear the questions they ask — which will make you so much smarter in your product offerings or services and how you relate to them,” Piland recommends.