FinTech Offers Relief for Millennials’ Financial Challenges
January 17, 2018
According to Forbes, millennials' top 3 fears are: debt, affording rent, and budgeting.
While the first two are fears based on existing challenges, the third may well supply the solution for the former two, especially given the tools that are available through digital financial management tools.
Many Millennials originally entered the world of financial reality facing a tepid job market, heavy student debt, stagnant wages, all while trying to fund a nest egg, it’s no surprise today’s Millennials are experiencing lots of financial challenges that can hold them back from achieving the life that they desire.
Let’s break these financial concerns down:
·Paying the man - According to a 2017 Student Loan Hero survey, 39 percent of millennials say too much debt is the No. 1 source of money stress and about two-thirds never learned how to handle debt. Between student loans, credit cards, and medical bills, avoiding debt (or making any progress paying it off) can seem impossible for millennials. Debt can accumulate quickly, and many Millennials live in constant fear of watching it grow.
·Keeping the lights on - In a 2017 focus group Geezeo conducted with millennials, many of the participants talked about it being tough to manage bills while trying to pay credit card and loan debt, child care and utilities. Most admitted not learning financial management skills from their parents or in school. They are trying to figure it out on their own.
·Getting ahead of the game - If millennials are struggling to cut down their debt while juggling bills, how are they able to save for emergencies and retirement? Many millennials are either confused about how to save or simply believe that they will have time to contribute when they are older.
How Financial Institutions Can Help
Millennials are the generation born between 1981 and 1997, and they have overtaken the baby boomers as the largest generation in US history, numbering 75.3 million people. They’ve grown up in a digital and increasingly online and socially-networked world. Most, if any, don’t even remember a time without the internet.
This means they see the world and interact with it differently than previous generations. They bank differently than any other generation, too. According to CCG Catalysts’ "Abstract Millennials and the Future of Banking” 68% of millennials use online banking, but 46% use a checkbook. This shows that while most are connected digitally to their bank many actually still view checks as a viable payment option. Offering alternative products like digital financial management meets the needs of Millennials while presenting additional revenue opportunities for financial institutions.
Furthermore, millennials engage with brands that have positioning similar to their own, as extensions of their own values and status.
This puts banks and credit unions in the unique position to offer millennials the products and services they demand - if they understand this new market. Offering them targeted, personalized services that engage and ultimately address their unique challenges is a must for financial institutions wanting to attract and retain this critical generation of customers.
Two significant ways financial institutions can attract and retain millennials:
·Technology Driven Banking Solutions – Offering banking solutions via mobile apps, enhanced desktop experiences and new channels, such as IoT, coupled with digital financial management platforms, are logical places to start. A heavy focus on usability, customization, and functionality will set one financial institution apart from another.
·Brand and Market Image – Millennials are looking for brands that will engage them and be transparent. Because of millennials' strong focus on technology, banks and credit unions can use digital to their advantage when cultivating brand. A strong social media presence and collaborative position, can also spur interaction with millennials and improve image.
“With so many advancements in technology, financial institutions have an exceptional opportunity to redefine the banking experience,” said Peter Glyman, President and Co-Founder of Geezeo. “Providing a simple and engaging digital banking user experience is a must right now, and will help attract and retain consumers, most notable, millennials.”
Geezeo is meeting the needs of millennials and other digitally-savvy consumers by creating products that offer them simple yet thoughtful insights into their finances. Geezeo’s digital money management platform transforms a financial institution’s digital banking platform into a seamless, holistic experience with the ability to project cash flow, analyze spending and net worth, set goals for saving, and establish spending targets.
“The use of technology benefits the consumer as well as the financial institution,” Glyman went on to say. “The insights banks and credit unions can access from consumer’s financial behavior gives a significant view into their needs, positioning the financial institution as the expert to meet those needs.”
If you are looking for ways to differentiate your digital banking experience to attract Millennials, Gen Z (yes, they will be your customers soon) or any technology centered consumer contact, reach out to any member of the Geezeo team.