Capturing the Elusive Millennial Market in Financial Services

Millennials have been the subject of a recent spike in the effort to more comprehensively understand and forecast the economic landscape in the United States. Studies and reports abound, centering on topics such as student debt, retirement uncertainty, stagnant wages, work-life balance, career trajectory and skillset – and the common refrain seems to be that millennials are more than just a little misunderstood.

Source: Facebook IQ white paper – Millennials + money: The unfiltered Journey

In a recent Facebook report on the millennial demographic and potential impact on the economic landscape, the company analyzed audience insights, conversation analysis and survey data in order to more deeply understand the millennial mindset towards finance. The study revealed some key findings for the financial industry. For example: Millennials are prioritizing debt elimination, with 46% stating that financial success means being debt free; and they’re worried about retirement, with 13% of respondents stating that the ability to retire is the No. 1 indicator of success and 21% saying that owning a home indicates the same. Along with these findings, the study also revealed that, not only do millennials prefer to pay primarily with cash (57%, versus credit), but 25% of millennials characterized credit cards as “something that worsens their financial standing.”

However, while millennials are wary of credit cards and the financial services industry, individuals that do have credit cards view them as a strategic tool to help build credit and increase financial flexibility. Further, 86% of study participants noted that saving was an important part of building financial stability however, millennials are 1.6 times more likely than Gen Xers/boomers to have no investments at all. Among the reasons cited for millennial underinvestment, the majority of participants (54%) feel that they just don’t have the money, while others don’t know enough about investing (24%) and 12% generally distrust financial institutions.

Source: Facebook IQ white paper – Millennials + money: The unfiltered Journey

These findings indicate that the FinServ industry must reassess their appeal and market position as it pertains to millennials and the capital they represent. Naturally – and as a result of the 2008 market crash – the financial services industry has been scrambling to gather, understand and quantify data surrounding the financial behaviors, habits, patterns and proclivities of millennials in order to better position themselves with this powerful and educated emerging market demographic. As organizations continue to invest valuable time and resources in new and innovative marketing and advertising initiatives aimed at breaking into and appealing to the millennial mindset, it is prudent to allocate some of those resources to seeking strategic guidance for constructing and implementing business development and marketing platforms that specifically target this increasingly powerful demographic.

Claim Your Youth Culture, for example, is a strategic consulting outfit that has developed a suite of programs that work together to assist credit unions, across the United States and Canada, to comprehensively engage the dynamic and energized youth market in order to grow and spread the credit union footprint and movement. And, if the millennials have shown us anything, marketing to and understanding the youth market is vital in order to not only expand market share, but to stay relevant. The CYYC team leverages years of experience from experts in credit union member engagement and the credit union movement, at large, to assist credit unions with strategic guidance for engaging this important and valuable demographic.

So, while credit unions and small community banks consider takeaways from the Facebook study to meet millennials where they are – such as offering solutions that address their most pressing needs, repositioning credit to align with those needs and helping millennials to develop a financial plan – Claim Your Youth Culture helps organizations to develop and utilize targeted and individualized strategies for cultivating and sustaining relationships in key areas to help directly grow credit union membership, loan and market share.

The future of the financial services industry requires the proactive, strategic positioning and utilization of the youth market, and organizations that wish to succeed in an ever-increasing, millennial-centric economy would do well to utilize the expertise that strategic consulting firms have to offer in order to ensure their own futures. The future is now – it’s time to start investing in it strategically.

Michael Barrio is Director of Public Affairs, Leverage Point, Inc. He can be reached at 505-338-4228 or michael@leveragepointinc.com.