There isn’t really a clear definition of the age group for Millennials, but the consensus seems to be that it refers to those people born between 1982 and 2004, although some may take that up to 2008 around the recession.
Either way, they will make up a substantial part of a typical intermediary client bank, and will require a number of financial products over the coming years. Therefore it is useful to take a look at their consumer behaviour – especially their attitude to money.
In a survey by YouGov, carried out with 4,000 millennials aged 18-34, 86% found the idea of being in debt stressful, yet 70% felt they managed their finances well. Perhaps not quite the attitude you would expect, and looking further into their banking habits, the theme continues.
Millennials had more interaction with their bank than any other age group – 60%, compared to people aged 35 to 54 (57%) and people aged 55 and over (56%). They also went for traditional banks, and it was the older group that were more likely to consider challenger banks. Millennials were also fairly sensible in saving; 34% saved for holidays, 27% for a rainy day, and the same per cent saved for a house.
It would be unwise, to ignore this group as they now represent the largest consumer group in the UK compared to generation X and the baby boomers, and they are not afraid of change.
Almost two-thirds said time is more important than money, and 48% don’t like to plan too far into the future. Some 32% want to own their own home, and only 15% wanted to start their own business. Websites are important to this group, with 87% stating it is their main source of information, and 70% used social media for information – so you need to have a strong presence in both.
However, their interaction with banks was mainly internet based including on mobile or via apps, with only 28% choosing phone, which is in line with our previous thinking. They are most likely to open a new account to replace an existing one; but their choice of bank was based on it being an established company. Convenience was important and access to other products. They valued a name they trusted, which in some cases was out of habit, because they had always used them.
This new generation of consumers seem to be conservative in their banking choice, and more likely to switch their bank account than older consumers. They use digital banking but trust and reputation are the key drivers for decision making.
These insights are useful in helping us to understand the needs of millennials and to identify how to best market and appeal to this important customer group.
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