How can Millennials money habits shake up to Financial Services sector?

Retail Financial Services

Retail Financial Services

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Moderator: Phil Alcock – PBF Solutions

Expert: Mark Dynes – Oliver Wyman 

Millennials are likely to be the first generation since the turn of the last century to be financially worse off than the previous generation. This is in large part due to the 08-09 crisis, plus the unaffordability of UK housing. With regard to their current FS requirements, their focus is on mobile banking and debt products rather than any savings / pensions / investments.

Millennials are much more inclined to be influenced by the ‘gamification’ of other purchasing decisions and so FS providers should be looking at online communities and social media to enhance their product distribution.

Millennials’ expectations, driven from other online transaction experiences such as Amazon, are likely to influence their interactions with FS providers. They also have very little patience nor loyalty so the initial online experience has to be slick and seamless.  “Instant gratification” was a constant theme in describing this demographic.

Lack of loyalty also presented the opportunity for niche players to use the banking infrastructure almost as a ‘utility’ platform. This means that Millennials are much more likely to engage with price- and service-led propositions rather than legacy brands. This presents opportunities for the mobile and digital players and non-traditional FS Fintechs.

One opinion aired was that employers should take more responsibility in shaping the money habits of Millennials by forcing them to save and live more within their means. 

What are the next steps?

There was a feeling that the most significant initiative to improve all ‘money habits’ across all customer segments would be to include personal finance education into the national curriculum. This should be driven by government and education sector, including a ministerial position.

 

 


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