Overcoming the Challenges Financial Institutions Face with Millennials

millennialsThe (almost) youth-obsession. That’s what I call it. Businesses are obsessed with trying to attract “young” talent, organizations ranging from community groups to libraries are targeting the young, and the FinTech world is unfailingly taking aim at Millennials. Just as other demographics have their challenges, however, so do Millennials, and these differ so significantly between groups that a separate strategy is needed for each one.

So what are the main issues facing the Millennial market, and how do we address those in a way that enables banks and other financial institutions to monitor and manage their impact on business?

These Challenging Times

Given that Millennials are typically aged between 25 and 38 right now, the challenges they face are fairly unique. Many of them are studying, faced with huge student loans that will take years to get rid of. Those who are educated struggle to find jobs, in an economy that favors youth while insisting on experience. Alternatives to working are more study, travel or basically doing nothing, none of which are conducive to building for the future.

Throughout all this, Millennials are bombarded with marketing efforts aimed directly at their generation, selling high-end housing, cars, clothing, credit and the experiences it can purchase. All the while, their biological clocks are announcing loud and clear that the time to reproduce is NOW! If ever a generation qualified to feel desperate, the Millennials are it.

The Future is Coming

Since nothing lasts forever, though, Millennials remain the market of the future, particularly for financial products. Habits formed during the early years roll over, so the financial institutions that provide service while they are young and broke are very likely to be the ones they turn to when they finish that Ph.D, secure that high-flyer position and buy that family home. So you can’t ignore them now. It’s important to measure the impact a group such as Millennials has on your institution, by monitoring what they do.

What you can do is gather data to build comprehensive visuals of your audience. External data from reliable 3rd party sources supports the internal intelligence, and you accumulate 1st party data as your Millenials move from paying down their student loans to receiving their first salaries. When you make use of quality data, it’s possible to develop integrated FinTech solutions around Millennials’ life events. JOHO can help you to create groups among your target audience to determine whether the products you’re offering them are being adopted or not, or if your offerings are being dropped.

The FinTech Challenge

Most financial institutions also face the challenge of reaching Millennials with the same tools and techniques used for their Boomer markets, the Gen X-ers and the upcoming Gen Z. Each demographic has a completely individual set of issues to deal with. This starts with the ways in which they earn their money, and goes on to the hopes and dreams. It’s no secret the younger generations favor experiences over possessions, but will that still apply when it comes time to start a family? Will home ownership continue to be the single biggest investment most Americans make in their lifetime? And with the shifting of retirement responsibility from employers to employees, how will Millennials make provision for their senior years?

Millennials are a group you need to pay attention to. Look at where they fall in the cylinders – know what they do and use that data. These are challenges all financial institutions will need to grapple with in order to capture the market they so desperately want. And as with everything else, knowledge is power and the existence of comprehensive data can provide the edge your institution needs, to make headway in a crowded market.