Much has been said about the Millennial generation, and a lot of it isn’t very positive. As someone who occupies the gray space between Generation X and the Millennials, I hear these statements and often find myself shaking my head and laughing softly at the hand wringing which has been part of human societies for millennia. It is one of the many unique perspectives I possess thanks to my training in history…the ability to recognize patterns; and many of these complaints sound familiar to me.
One thing that I can say is manifestly true of Millennials is that they are Disruptors. After coming of age during the 2008 Great Recession and seeing many of the promises society made them (work hard and you will get ahead, college will get you a good job for life, etc.) crumble to dust, they aren’t inclined to follow the same well worn path as previous generations; we’ve seen how following that path can lead you to disaster. The answer? Make a new path. If something isn’t working, it’s time to fix it.
Last week at the office I ran across this infographic from the American Bankers Association titled Millennials and Banking.
(Note for anyone from the ABA who may be reading this: The point of Infographics is that they are graphical representations of information meant to be shared. When you make them available only as a PDF, you limit the ability of people to easily share them. People can easily Tweet a JPEG or PNG file…they cannot easily Tweet a PDF. Just pointing that out.)
This infographic contained a lot of good information for the banking industry, which is one of the many industries currently finding itself under threat from the Disruptors of the Millennials generation. It points out many of the same facts you’ve probably heard before: 75% of Millennial college graduates have student loan debt. The average balance of that debt is $29,000. The infographic also states that the top financial priorities of this generation are paying down their debt (43%) and saving for the future (38%).
As if that’s not challenging enough for banks, the infographic also points out that 71% of Millennials would rather go to the dentist than listen to what banks are saying (a legacy of The Great Recession) and 53% don’t think that their banks offer anything unique. With numbers like that, if you are a bank getting Millennials through your door is going to be challenging to say the least.
So what’s the answer? Disruption as far as Millennials see it. If you were a Millennial with student debt and your top priority is to pay it down, you will want to make saving money to do that as easy as possible. Mobile and internet banking is one part of the answer…but why stop there? For example take the smartphone app Acorns. This app takes a page out of the the shopping playbook you may be familiar with: rounding up your purchases. Only instead of putting that extra money towards a charity or a cause, Acorns rounds up your purchases with your debit card and puts it into an investment account. The user specifies how risky they want the investment account to be, and the funds can be easily accessed to do things like pay down debt or cover emergency expenses. Is it a perfect solution? Of course not…investing is a risky business. But if the alternative is to manually log into your banks app, calculate the purchase round up yourself and then deposit those funds into your savings account, which is likely earning you nothing in interest, then you’ve lost Millennials already. With Millennials, it’s all about usability.
For those in the banking industry, you now have two options: wring your hands and fret over the future, or look at competition like this from Silicon Valley and adapt. Can you offer something similar? What can you do to make saving easier for what is soon to be the largest cohort in the US Workforce? How else could you address the needs of this tech-savvy generation? It goes beyond just having a website; you need to work harder to win the generation who has grown up with websites because just having a website is old hat for this generation.
For all industries facing disruption from the Millennials, you can chose your path when the disruption comes; you can be reactive or proactive. Odds are being proactive is going to not only serve you better in the long term…it’s going to help you survive.