Three ways to help meet the financial needs of Millennials
In our last post, we discussed how Millennials differ financially from Generation X and Baby Boomers.
- Their prioritization of lifestyle has led them to be decent short-term savers
- Their optimism has provided them a false sense of security with long-term retirement savings and planning
- Their lack of financial literacy means they are more conservative with the financial products and services they leverage
- They potentially being short sided in their views of credit and investment risk
Banks and credit unions need to strike a delicate balance to help Millennials meet their financial needs today and into the future.
Here are three ways to help meet the financial needs of Millennials:
1. Boost the financial literacy of Millennials:
Support Millennials in a way that is relevant and targeted to their needs. They don’t like being told what to do and prefer access to the right information.
They want to be self-sufficient in gaining knowledge and making decisions regarding which route to take. This can be said for all areas of their life from their choices of career, to education and to finances.
Create a repertoire of self-service accessible financial literacy information that is fact driven and not preachy. Use search engine optimization to target keywords they are searching for. As a bonus, provide online content in different formats (video, infographics) to drive loyalty. You can read more on our tips for driving loyalty, including self-service access to information here.
A common pitfall in building this content is to focus it too specifically on the product. For example, rather than have a resource stating the features and benefits of a credit card, such as building credit, you can develop educational material around the benefits building positive credit and the products and services that can assist, such as a credit card.
2. Provide historic financial usage to Millennials with personalized products and service recommendations
It is important to enable Millennials to draw comparisons and relevancy based on the situation. Providing access to historical financial information is a start but can be amped up with basic analysis and recommendations, but also enhanced tools and features that enable them to slice and dice the data to uncover trends themselves.
The opportunity to see how their money would have performed in other investments is a great way to help educate Millennials. This sharing can compare different investment products in how they work and demonstrate the correlation of risk and reward and the impact of timing. To take it up another notch, live simulations offers an opportunity for Millennials to bridge what they’ve learned and test drive it in real life before taking the plunge.
Millennials expect personalization so it is important to also use these trends and recommendations in day to day interactions rather than offer a blanket ‘product of the day’ pitches.
3. Help Millennials see the future and they will start to plan for it
When it comes to retirement, Millennials short-term savings focus and optimism has created a blind spot. Building engaging tools to enable them to see the future will trigger action to plan for it.
Many financial institutions have integrated goal setting into their savings platforms. This is highly recommended to both bridge awareness of key savings categories for the users, including long-term items such as retirement, but also enable more personalized interactions. Layering in gamification badges and scoring also helps create an immediate reward for taking on a long-term goal, learning about different products and services or reaching a savings goal milestone.
A past campaign using picture aging technology to show users what they will look like at retirement age is a great example of helping Millennials very literally ‘see’ the future. A 2011 Stanford Behaviour Research experiment has proven that this increase savings behavior, with “those who interacted with their virtual future selves exhibited an increased tendency to accept later monetary rewards over immediate ones.”
Supplying Millennials with the education and information to take the driver’s seat of their financial future will support a generation of savers transform into a generation of well-diversified investors. We’d love to hear your thoughts on the topic. Share with us by getting in touch with us at firstname.lastname@example.org.