A Guide to Millennial Marketing in the Financial Services Industry
It’s 2016 and marketers across all industries remain as focused as ever on marketing to millennials. In fact, millennial marketing is four times larger than demographic. With 80 million members and direct annual spending power of $200 billion, the millennial generation is a huge opportunity that financial services firms can’t afford to miss.
Mobile and Online Marketing are Key to Attracting Millennials
Millennials grew up in the age of always-on, connected technology. The use of technology in all aspects of their daily lives is one of the defining characteristics of their generation. Not only do a higher percentage of Millennials own smartphones than any other generation, but 18% are mobile-only Internet users, versus 5% of Generation X and 3% of Baby Boomers (Corporate Insight).
Millennials already account for 43% of all mobile banking and finance usage. According to Corporate Insight’s survey of online investors,
- “69% of Millennials indicated they had logged into their account using a mobile device in the past 12 months”
- Versus 41% of Generation X and 30% of Baby Boomers
- 51% of Millennials said that their brokerage firm’s mobile capabilities were “very” or “extremely important” to them
- Versus 36% of Generation X and 19% of Baby Boomers
Online banking is clearly the preferred method for millennials when it comes to interacting with their financial institution. In research by Gemalto, 27% of millennials say they have never visited their branch and only 14% say they prefer doing their banking in person. 77% say they are using online services every month. Plus, many millennials have indicated that they believe mobile banking has become an “essential part” of managing their finances with nearly 40% reporting that their financial apps help them maintain control of their finances. (Gemalto)
Social Media Informs Financial Investments and Decisions
Social media is an ideal channel to connect with millennials by staying relevant, sharing educational advice, and engaging in personalized connections. Financial institutions will need to embrace social media as an integral ingredient in their overall millennial marketing mix. Millennials turn to social networks to get advice and recommendations from their peers, visit a financial company’s social pages, and look for educational content to make decisions. Affluent millennials are 2x more likely to use social media to inform their financial investments and decisions.
Additionally, 87% of affluent millennials seek thought leadership through at least one type of social network. And millennials share 13x more content about finances on LinkedIn than Gen X.
Millennials Seek Personalized Financial Advice and Content
TD Bank conducted a survey on millennial banking habits. The results of the survey indicated that millennials require more support and advice with their personal finances.
According to the report:
While 59% of millennials reported that they are “extremely” or “very” knowledgeable about their day-to-day banking products like checking accounts, they still want advice on personal finance topics, including:
- Savings (32%)
- Creating a budget (30%)
- Credit cards (26%)
Another study by FINRA, found that educational content will strongly appeal to this generation’s lack of financial security. The study showed:
- Almost half (46%) of millennials are concerned they have too much debt, slightly less but on par with gen Xers (50%) – but much higher than the 38% of baby boomers and 23% of respondents from the silent generation who feel they have too much debt.
- 43% of millennials engaged in costly non-bank forms of borrowing in the last five years, like using pawn shops and pay day lenders. By contrast, 21% of boomers and 8% of the silent generation used non-bank forms of borrowing.
The financial services industry has a strong opportunity to build relationships, brand loyalty, and brand advocacy with this generation through targeted advice and educational content. A major trend in financial education is the use of interactive multimedia, videos, and social groups and content. According to a report by Corporate Insight, “Examples include videos and microsites like Fidelity’s MoneyFirsts that deliver engaging videos that straddle the line between education and entertainment. Created through a partnership with LearnVest, this microsite attempts to speak directly to Millennials, not through trendy language (‘#YOLO’) or by dumbing the content down, but by showing pictures of young people – rare in financial services marketing – and addressing personal finance and planning from the standpoint of someone in early adulthood. Rather than preaching about investing and saving for retirement, the site focuses on the goals that Millennials might actually want to save for, like travel, buying a first house or starting a family.”
By using content to become a trusted advisor for this generation, financial institutions can tap into the millennial market in innovative and personalized ways.
It is imperative for banks and financial services to capture the millennial market with strategies they will respond to. After all, this is a market segment that will soon hold the greatest portion of wealth in the US.
To learn how financial organizations can find millennial prospects in need of financial services and solutions, download this free guide on Right Time Marketing.