Millennials are an important demographic group, and big banks need to understand their attitudes and habits well if they want to have or keep them as customers. If they don't, they may lose business to financial-technology companies and smaller banks.
Millennials are defined as those born between 1982 and 2000. They're now the largest living generation in the U.S., surpassing baby boomers. By 2025, they're expected to generate 46% of all U.S. income, according to a survey by First Data. So it's no surprise that banks and fin-tech start-ups are trying to attract them as customers.
Millennials are tech-savvy and digitally connected. They "live" online and prefer to use banking methods that are easy to understand and simple to implement. According to the First Data survey, more than one-fifth of all millennials have never even written a physical check to pay a bill, and 63% of adult millennials don't even have a credit card. The survey found that 71% of the millennials prefer transactional banking to a relationship banking and would "would rather go to the dentist than listen to what banks say."
A Facebook IQ report released earlier this year shows millennials' attitudes about personal finance seem to be different from those of baby boomers, too. The report, titled "Millennials and Money: The Unfiltered Journey," found that millennials are not only changing the traditional way of banking but also redefining the meaning of financial success. Saving is a priority; around 86% of millennials surveyed said that it was important to them. Forty-six percent of millennials also said that financial success means being debt free. Nearly half (49%) say they prefer to bank using their mobile apps on smartphones instead of going to a bank branch, using a computer or making a phone call.