Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Urban and suburban Millennials drifting away from the bank branch
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- Figure 1: Banking preferences, by geographic area, December 2016
- Saving for emergencies a struggle
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- Figure 2: Top five financial challenges for Millennials, December 2016
- AI awareness exceeds Millennials’ willingness to use it
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- Figure 3: Awareness or usage of artificial intelligence in finance, December 2016
- Only half of Millennials confident in their financial knowledge
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- Figure 4: Confidence in financial services knowledge, December 2016
- Millennials still have doubts about banks’ trustworthiness
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- Figure 5: Bank brand perceptions – Traditional, stable, trustworthy, December 2016
- The opportunities
- Younger Millennial males value customer service over interest rate
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- Figure 6: Preference for customer service over high interest rate, by age and gender, December 2016
- Millennials aspire to spend money on experiences, not things
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- Figure 7: Preference to spend money on experiences, December 2016
- More than half of Millennials think money will bring happiness
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- Figure 8: Agreement that money will buy happiness, December 2016
- Financial technology improvements welcome
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- Figure 9: Convenience of financial technology improvements, December 2016
- What it means
The Market – What You Need to Know
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- The Millennial generation is the largest in the US
- Millennials are more diverse than prior generations, but less than those up-and-coming
- Average Millennial salary tops $60,000
- More than a quarter are still paying student loans
- Majority of Millennials have checking or savings account
Market Size
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- The Millennial generation is the largest in the US
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- Figure 10: Share of population by generation, 2017
- Millennials are more diverse than prior generations, but less than those up-and-coming
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- Figure 11: Distribution of generations, by race, 2017
- Figure 12: Distribution of generations, by Hispanic origin, 2017
- Men and women almost equal percentages in Millennial generation
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- Figure 13: Population by gender and generation, 2017
Market Factors
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- Millennials head nearly 20% of households
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- Figure 14: Number of households, by age of householder, 2006 and 2016
- Millennial households with children make up 50% of all households with children
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- Figure 15: Households with own children under age 18, by age of householder, 2016
- Continued uncertainty toward generation’s financial future
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- Figure 16: Opinion toward Millennials’ financial future, December 2016
- The average Millennial salary tops $60,000
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- Figure 17: Average income and average expenditures, by age, 2015
- Financial services account ownership
- Majority of Millennials have checking or savings account
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- Figure 18: Account ownership – Banking products, December 2016
- Black Millennials less likely to own any financial account
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- Figure 19: Account ownership – Banking products, by race/ethnicity, December 2016
- Millennial card holders most likely to own a Visa
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- Figure 20: Credit card ownership – American Express, Discover, MasterCard and Visa - one or more cards, October 2015-November 2016
- More than a quarter are still paying student loans
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- Figure 21: Account ownership – Savings and loan products, December 2016
- Millennial parents looking to build savings through investments
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- Figure 22: Account ownership – Investment products, by presence of children in household, December 2016
Key Trends – What You Need to Know
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- Financial services brands continue to add AI, mobile technology
- Mobile, desktop app reduces need for login
- Financial services still seen as a mystery to half of Millennials
- Fintech firms can apply for bank licenses
What’s In?
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- Millennials and financial technology
- MasterCard launched AI machine learning product to monitor fraud
- Banks continue roll-out of cardless ATMs
- PayPal One Touch exceeds expectations
- Credit card brands seen as more “recommended” than banks
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- Figure 23: Brand perception analysis – Recommended, December 2016
What’s Struggling?
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- Millennials worry about saving for unexpected costs
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- Figure 24: Top financial challenge – Saving for emergencies, by presence of children in household, December 2016
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- Figure 25: National General accident fixed-benefit mailer, February 2017
- Skepticism toward using alternative financial lenders
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- Figure 26: Interest in using alternative lenders, December 2016
- LendingTree launches new comparison platform
- Half are confident in their financial services knowledge
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- Figure 27: Confidence in financial services knowledge, December 2016
What’s New and What’s Next?
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- Fintech firms can apply for bank licenses
- Adulting School
- Ally’s “Do It Right” community
- Capital One’s Credit Wise
The Consumer – What You Need to Know
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- Millennials generally optimistic about their current financial situation
- Saving for emergencies, bill payment top of mind
- Millennials believe credit card brands to be stable, trustworthy
- Millennials aspire to spend money on experiences, not things
Health of Current Finances
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- Millennials generally optimistic about their current financial situation
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- Figure 28: Current financial situation, December 2016
- US Northeast region most confident in finances
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- Figure 29: Current financial situation, by geographic region, December 2016
Current Financial Challenges
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- Saving for emergencies, bill payment top of mind
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- Figure 30: Top five financial challenges for Millennials, December 2016
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- Figure 31: Lendingtree HELOC email, March 2017
- Millennials more likely than general population to be concerned about the present
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- Figure 32: Biggest financial challenges, gen pop vs Millennials, December 2016
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- Figure 33: Wells Fargo home buying direct mail, June 2016
- Millennial challenges vary based on geographic region
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- Figure 34: Savings and bill payment challenges, by region, December 2016
- Millennial parents worry more about medical expenses, credit card debt
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- Figure 35: Savings and bill payment challenges, by presence of children in household, December 2016
Embracing Technology
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- Urban and suburban Millennials drifting away from the bank branch
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- Figure 36: Banking preferences, by geographic area, December 2016
- AI awareness exceeds Millennials’ willingness to use it
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- Figure 37: Awareness or usage of artificial intelligence in finance, December 2016
- Preference for personal customer service response remains
- Most consumers prefer higher interest rate over better customer service
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- Figure 38: Preference for customer service over high interest rate, December 2016
- Younger Millennial males value customer service over interest rate
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- Figure 39: Preference for customer service over high interest rate, by age and gender, December 2016
Payment and Spending Behaviors
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- Millennial consumers more likely to save than spend extra money
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- Figure 40: Tendency to save or spend extra money, December 2016
- Millennial Hispanics have more difficulty managing their credit
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- Figure 41: Difficulty managing credit or savings, by race/ethnicity, December 2016
Financial Brand Perceptions
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- Bank of America considered most traditional, Chase considered stable
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- Figure 42: Bank brand perceptions – Traditional, stable, trustworthy, December 2016
- Millennials believe credit card brands to be stable, trustworthy
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- Figure 43: Credit card brand perceptions, December 2016
- Visa, MasterCard thought to be more innovative, personal than most banks
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- Figure 44: Financial brand perceptions – Personal, innovative, December 2016
- Lesser known banks and lenders less trusted than more traditional, well-known
Sources of Financial Information
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- Only half of Millennials confident in their financial knowledge
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- Figure 45: Confidence in financial services knowledge, December 2016
- One third trust friends and family for financial information
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- Figure 46: Sources of financial information, by gender, December 2016
- Millennial parents look to social media as well
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- Figure 47: Sources of financial information, by gender and presence of children in household, December 2016
Attitudes toward Finances
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- Financial technology improvements welcome
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- Figure 48: Convenience of financial technology improvements, December 2016
- Midwesterners most doubtful of financial technology advancements
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- Figure 49: Convenience of technology improvements, by region, December 2016
- Security fears still present, but manageable
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- Figure 50: Comfort with security of financial information, December 2016
- Investing in the stock market seen as risky, but necessary
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- Figure 51: Willingness to invest in stock market, December 2016
- Those with a lower household income see less benefit in investing
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- Figure 52: Willingness to invest in stock market, by household income, December 2016
Attitudes toward Money
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- Millennials aspire to spend money on experiences, not things
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- Figure 53: Preference to spend money on experiences, December 2016
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- Figure 54: Groupon Holiday online ad, December 2016
- Financial success defined by ability to pay bills, have funds left over
- Personal time valued more than money
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- Figure 55: Valuing personal time over money, by age in generation and race/ethnicity, December 2016
- More than half of Millennials think money will bring happiness
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- Figure 56: Agreement that money will buy happiness, December 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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