The Millennial-Dollar Question: Should Banks Try to 'Get" Gen Y?

Kathleen Lucente

Millennials are a misunderstood bunch. Every generation is, or feels that way—but this one in particular has marketers slinging stereotypes and shaking their heads. You’ve heard the labels. Lazy. Entitled. Fickle. Bored. Bent over their phones.

Yet banks and finance professionals who buy in to that typecasting risk losing money. Because millennials, aka Gen Y, now include 80 million people—the largest, fastest-growing generation in the United States—who would actually love to do business with banks. Really. Or they would if banks met them halfway.

“The fact is, we’re creating wealth, and we need somebody with expertise to help us,” Jason Dorsey says. “The vast majority of us want to actually sit down with a financial adviser and have them walk us through a plan.”

Dorsey is an expert on millennials. He is one, he knows many and he conducts research about millennials as a group through his Center for Generational Kinetics in Austin, Texas. These days, he’s in the business of busting myths about this demographic, which he defines as people born between 1977 and 1995.

I hired Dorsey not long ago to speak to my Red Fan clients (which include a leading digital banking provider for community financial institutions) about how millennials actually think, and why banks should care. Here are some points financial people should consider in seeking business of this influential age group:

Millennials DO have money. “There’s this perception out there that we’re walking around with our pants falling off, we’re unemployed, Mom’s paying the gas bill,” Dorsey notes. “But we’re also 25 percent of all new millionaires.” As a generation, millennials will outspend baby boomers in 2017. True, 23 percent of these spenders typically have less than five dollars’ cash in their pocket. But that just means mobile banking is more important than it ever has been.

They ARE ‘into business.’ More than 30 percent of millennials are looking to start their own companies—in fact, this may be the most entrepreneurial generation ever. And for entrepreneurs, financing and banking relationships matter.

They ARE into planning. “There’s this misconception that we’re not saving or investing and that is false,” Dorsey says. “Millennials are thinking about retirement now, and many are taking action. But what they need is professional guidance to help fill in the dots.”

They are NOT ‘tech savvy.’ “We are tech-dependent,” Dorsey points out.Big difference. “We often don’t know how technology actually works, only that we can’t live without it.” Millennials communicate differently than their elders, he agrees—by text and online. “So engage us! Don’t expect us to do phone calls and drive over to see you for every little thing.”

And keep it simple, since yes, demanding instant gratification is one stereotype that fits. Banks should not just be making services mobile-friendly but also thinking, “How can we design the interface so it just works?” The fewer clicks the better.

Do that and you’ll wind up attracting older folks, too. “Because here’s the thing: Every other generation is following our lead,” Dorsey notes. “Gen X and boomers are starting to communicate more like us.”

Banks are NOT uncool. In fact, Dorsey’s research shows people his age would rather meet the president of their local lender than the president of the United States. And once they find a bank they like, their social media habit makes them an unbeatable generator of leads. One mention of bank-love on Instagram could create a stampede.

Not ALL are ‘entitled.’ Some millennials may have a seemingly inflated view of their due in the world—in part (it must be said) because baby boomers raised them that way. But, “that is not true for everyone in my generation,” Dorsey insists. And ironically, it’s other millennials,“who have their stuff together or are struggling to gain real-world traction” who are most offended by their oblivious peers.

Sadly, some company managers aren’t just offended by entitled behavior—they’re alienated, writing off young people as too annoying to bother with. “Every generation assumes the one after has it easier than they did,” Dorsey notes. “But it’s in every [business] leader’s interest to make the most of each generation. Gen Y is simply the new kid on the block. “

Speaking of stereotypes... Racially, socially, and every other way, millennials are the most diverse generation in U.S. history—so much that they don’t even see diversity unless it’s not there. Millennials will notice if that’s your story. So get with the multicultural program and make sure it’s authentic—from age to gender to ability and background.

They’re sooo young. Yes. Which means they’ve got many years ahead—not to mention the longest statistical life span in human history. So reach out, treat them right and you’ve got multitudes of customers for life.

Will they ever grow up? “It is true millennials are making financial decisions later in life,” Dorsey says. “We’re graduating college later, and we’re entering the workforce, getting married and having kids later.” Some people call that delayed adulthood. But for financial planners with millennial clients, it basically means the investment risk profile needs readjusting for a later age. “It doesn’t mean we’re not interested in financial services,” Dorsey says.

Bottom line: “Millennials do want your help, we do have money, we areloyal, and we will refer our friends!” he says. “Just stop leaving us voice mails. Send us a text.”

Reach out to Kathleen @ [email protected]