The newsLINK Group - Millennials and Their Banking Habits
Editorial Library Category: Banking & Finance Topics: Millennials, Banking Habits Title: Millennials and Their Banking Habits Author: newsLINK Staff Synopsis: Attracting and keeping millennial customers is important because there are now more millennials in the U.S. than members of the baby boom generation. As of June 2017, there were 75.4 million millennials, and 74.9 million baby boomers. By 2022, experts tell us that 40 percent of the workforce will consist of millennials. Editorial: Millennials and Their Banking Habits 4064 South Highland Drive, Millcreek, Utah 84124 │ thenewslinkgroup.com │ (v) 801.676.9722 │ (tf) 855.747.4003 │ (f) 801.742.5803 Editorial Library | © The newsLINK Group LLC 1 Attracting and keeping millennial customers is important because there are now more millennials in the U.S. than members of the baby boom generation. As of June 2017, there were 75.4 million millennials, and 74.9 million baby boomers. By 2022, experts tell us that 40 percent of the workforce will consist of millennials. The millennial generation, especially those born between 1981 and 2005, have been called “unbanked” because many of them don’t have anything to do with what banks offer. They manage without checks, credit cards, or physically walking into a bank. It makes sense that every generation has its own specific experiences and needs. What are the main differences between millennials and earlier generations? One obvious difference: The Great Recession made a big impression on millennials. They don’t trust big financial institutions as a direct result of that experience, and they are slower to use credit cards; a third of those between the ages of 18 and 29 have never even signed up for a credit card. Seventy-one percent would prefer a trip to the dentist over a lecture about banking. In addition, 46 percent of millennials prefer to support local businesses instead of national ones. Additionally, millennials are 1.5 times more likely to talk about money online, and they like using technology to get access to financial services, and they are three times more likely to use a phone to open a new account than to walk into a branch in person. Eighty-seven percent use social media websites to find advice about financial matters. More than 80 percent of them owned a smartphone halfway through 2017, and 77 percent take their smartphones with them everywhere. Approximately 89 percent check their phones less than 15 minutes after they wake up. Millennials earn 20 percent less than the baby boom generation did at the same age even though they also tend to be more educated. Seventy-five percent of those who graduate from college have student debt, and the average size of that debt is $29,000. The top 20 percent have a median net worth that is eight times more than the lower 80 percent. Some 86 percent save every month. According to the financial experts, many millennials save more than half of what they earn, and keep it in the form of cash. They only put 28 percent into stocks. Other millennials put 43 percent of their income toward their debts and 38 percent toward savings. That compares with earlier generations who only kept 23 percent of what they earned in cash, and put 46 percent into stocks. Approximately 57 percent say they would be willing to use a credit card to pay for an emergency. What else do we know about millennials? They form the largest generational cohort in U.S. history. They are also culturally, racially, and economically diverse. Only 26 percent get married before they are 32, but 70 percent plan to marry eventually, and 93 percent of those who rent hope to buy a home someday. Seventy-four percent want children. Even though all millennials appreciate online options, 81 percent of the younger millennials (18–25) also use branches. Why? They are inexperienced financially and appreciate having the option of face-to-face contact even though 57 percent of them also use mobile banking apps. Having a branch available when they need one might even be the reason why they choose a community financial institution. The older millennials (25–35) use mobile banking apps, too, but at 47 percent the percentage is much less. A Harris Poll that was commissioned by BancVue surveyed more than 1,000 U.S. adults. The poll offered the following insights into the habits of millennials: Approximately 50 percent have checking accounts with a national bank. Approximately 29 percent use a credit union or community bank instead. Some 38 percent would actually prefer a community financial institution but could not find one that offered financial management tools, free checking, and reward checking.
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