THE MILLENNIAL FINANCIAL HEALTH REPORT: How the largest generation is saving and managing their money, and how banks can target products and messaging to reach them
Summary List Placement This is a preview of the Business Insider Intelligence Millennial Financial Health premium research report. Purchase this report here. Business Insider Intelligence offers even more banking coverage with our Banking Briefing. Subscribe today to receive industry-changing financial news and analysis to your inbox.
As the largest living generation by population, and soon income, millennials are a prime target for banks — butovergeneralizations of their financial health make it hard to attract the group.
Millennials have been the subject of misinformation with regard to financial literacy, spending habits, and brand loyalty. In reality, they're encountering diverse financial milestones, and tailoring products directly to their varied needs can help banks take full advantage of the opportunity presented by serving millennials. Business Insider Intelligence conducted an exclusive survey to better understand US millennials' financial health. The Master Your Money: Learn & Plan Survey was designed by Business Insider Intelligence and fielded online from November 23 to 27, 2019, to a third-party sample of 2,007 US millennials aged 19-37. The sample was selected to closely resemble the overall US population (based on census data) on the criteria of age and gender. The results of the survey reveal fresh insights about millennials that banks and other financial services providers can use to build targeted products and tailored messaging for the group. Our data highlights three areas that are impeding this generation's financial health: debt, trouble growing savings, and lack of financial education. Millennials' debt is heavily concentrated in credit card debt, student loan debt, and auto debt. Meanwhile, low-income growth and high debt burdens have made it more challenging for them to save. These findings, and our analysis, are supported by interviews with executives from major banks, like JPMorgan Chase and Bank of America. But millennials aren't a homogenous group — rather, they behave like three "sub-generations," with distinct lifestyle habits, financial needs, and behaviors. These factors impact the sub-generations differently, making it important for banks to understand the characteristics of millennial consumers in each segment, which can sharpen acquisition and servicing strategies for banking providers. In The Millennial Financial Health Report, Business Insider Intelligence identifies strategies for banks and financial services providers to reach millennials. We identify three millennial sub-generations, the unique financial needs and challenges of each, and the ways providers can tap into them. We offer recommendations for acquiring millennial customers, encouraging them to save more, and deepening the customer relationship to become a trusted advisor. The companies mentioned in this report include: Acorns, American Express, Apple, Bank of America, BuzzFeed, Capital One, Citi, Citizens Bank, Credit Karma, Digit, Disney, Goldman Sachs, Hulu, JPMorgan Chase, Mint, Navy Federal Credit Union, Netflix, Robinhood, Santander, Sprint, Stash, US Bank, Verizon, Wells Fargo. Here are some key takeaways from the report:
Millennials are estimated to be the largest living generation in the US — but the disparate financial needs of consumers at different stages of this age group can make it challenging for banks to take full advantage of the opportunity presented by serving them. They're often treated like a homogenous group, but millennials can be divided by age into sub-segments that boast different financial realities, which banks need to understand in order to effectively cater to all customers in this generation. Supporting millennials through their unique financial milestones can allow banks to form lifetime relationships with these consumers early on. Banks should take a behavioral approach where they meet consumers' specific needs based on their actions rather than try to broadly serve the generation.
In full, the report:
Uses primary data to identify the unique needs and challenges of each millennial sub-generation. Explores strategies banks should consider to tailor their offerings to millennials' needs in order to improve their financial health via savings tools and, in turn, cement their loyalty as customers. Supports analysis using interviews with executives from incumbent providers like JPMorgan Chase and Bank of America. Gives recommendations for banks regarding how to acquire, service, and encourage millennials to grow savings. Highlights noteworthy strategies taken by banks and third-party financial apps to reach this generation.
Interested in getting the full report? Here's how to get access:
Business Insider Intelligence analyzes the banking industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
More like this (3)
THE DIGITAL BANKING ECOSYSTEM: These are the key players, biggest shifts, and trends driving short- and long-term growth in one of the world's largest industries
This is a preview of Digital Banking Ecosystem research report from Business Insider Intelligence. Purchase this report. Business...This is a preview of Digital Banking Ecosystem research report from Business Insider Intelligence. Purchase this report. Business Insider Intelligence offers even more fintech coverage with Banking Pro. Subscribe today to receive industry-changing finance news and analysis to your inbox. The banking industry is in the grips of an identity crisis. Leaders of the world's largest banks — such as Citi, BBVA, and Goldman Sachs — have begun describing themselves as technology companies with banking licenses. However, this description is still aspirational. Executing the vision will require billions of dollars in investments, the restructuring of teams, a reimagining of the entire banking technology stack, and the adoption of a far more customer-centric business view. The stakes of failing to transform are high: Accenture projects that 35% of all bank revenues could be at risk from more tech-savvy competitors like fintechs as soon as 2020 for incumbents that fail to up their game. As a result, a wave of digital transformation is now sweeping the banking industry, as incumbents shore up against consumer demand and competitive pressures. Major banks have already announced multibillion-dollar, multiyear digitization projects: By 2021, global banks' IT budgets will surge to $297 billion, up 14% from $261 billion in 2018, according to Celent. Many incumbent banks are opting to decrease their branch budgets and networks and reinvest their resources in digital channels such as mobile instead to cater to current consumer preferences, and are enlisting the help of tech-savvy software vendors to modernize their tech stacks from top to bottom as part of this process. In the Digital Banking Ecosystem report, Business Insider Intelligence explores the incumbent banking landscape as a whole, and the third parties banks are calling on to help their transition to digital. We then take a closer look at the three biggest drivers for incumbent banks' digitization push: digital-native competitors like neobanks and Big Tech companies; changing consumer behaviors and banking channel preferences; and a growing array of cybersecurity threats. Lastly, we examine what incumbents are already doing today to transform themselves into digital-first organizations to compete in a customer-centric, data-driven global economy, and how they are learning to meaningfully measure the progress of their transformations. The companies mentioned in this report include: Acronis, Amazon, Ant Financial, Apple, Ario, Banco Galicia, Bancorp, Bank of America, Bank of England, Barclays US Consumer Bank, BBVA, BNP Paribas, Caixa Geral de Depositos, CaixaBank, Capital One, China Construction Bank, Citigroup, Citizens Bank, Compliance.ai, CSI, Dave, Detroit Fintech Bay, Deutsche Bank, Diasoft, Emirates NBD Bank, Finastra, Finn AI, Finxact, First Direct, FIS, Fiserv, Flagstar Bank, Forcepoint, ForSee, Forward Networks, Geezeo, Gemalto, Goldman Sachs, Google, Grab, Hello Bank, Help Systems, HotJar, HSBC, IBM, ICBC, Infosys, ING, ING Direct, Intesa Sanpaolo, Jack Henry, JPMorgan Chase, Kenna Security, Lloyds Bank, Lyft, Midwest Bank, Mission Bank, Monzo, N26, Nationwide, NatWest, nCino, ObserveIT, OnDeck, Openbank, Osano, Personetics, PNC, RBS, Reciprocity Labs, Saga, Santander, Sberbank, Square, Starling Bank, Strands, Tanium, Temenos, Tencent, Thomson Reuters, Thought Machine, Tink, TSB, Uber, United Income, US Bank, Wells Fargo, Zelle, and Zopa. Here are some of the key takeaways from the report: Incumbent banks are intensifying their digitization efforts in the face of changing consumer demands and growing competitive pressures. The number of US consumers considering switching banks in the next 12 months increased by 86% from a year before, from 6.9 million to 11.9 million, per Resonate, with consumers citing the need for better digital banking services and more personalized products and tools as major motivators. Meanwhile, tech giants like Google and Amazon are poised to grab up to 50% of the $1.35 trillion in US financial services revenue from incumbent banks, per McKinsey, leveraging their tech expertise to lure away customers. Legacy channel usage is steadily dwindling, while digital channel usage is firmly on the rise. This turn to digital is being accelerated by younger, tech-savvy generations like millennials and Gen Zers quickly becoming banks' largest addressable market. Once the most widely used banking channel in the US, branch use will drop at a compound annual growth rate (CAGR) of -2.01% between 2019 and 2024, per Business Insider Intelligence projections. Meanwhile, mobile banking, the least-used banking channel in 2008, is expected to grow at a CAGR of 2.83% between 2019 and 2024, the highest among all channels. To digitally transform, banks need to join forces with partners, enemies, and frenemies alike. Vendors will be key to the modernization of banks' IT, with specialists catering to each layer: 81% of banking executives surveyed by Finextra and the Euro Banking Association cited working with partners as the best strategy for achieving digital transformation goals. Banks' growing IT budgets reflect their changing priorities: By 2021, global banks' IT budgets will surge to $297 billion, up 14% from $261 billion in 2018, according to Celent. Banks' digital transformations are already well under way, and incumbents are making massive changes to the way they operate and plan for the future to compete in a digital economy. They're doing this by embracing digital-ready innovation models; adopting new business models like open and direct banking; and reorienting their tech stacks around the digital customer experience. In full, the report: Outlines the incumbent banking landscape and its components, and the structure of the banking tech stack and the vendors supplying each of its layers. Explains the biggest drivers behind banks' digital transformations, especially the rise of tech-savvy competitors, shifts in consumer behaviors, and a growing number of cybersecurity threats. Highlights the steps banks are already taking to turn themselves into digital-first, data-driven, and customer-centric organizations. Evaluates the progress incumbents have made towards digitization, and how deeply they've embedded themselves in the emerging cross-industry digital banking ecosystem. Interested in getting the full report? Here's how to get access: Purchase & download the full report from our research store. >> Purchase & Download Now Sign up for Banking Pro, Business Insider Intelligence's expert product suite tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >> Inquire About Our Enterprise Memberships Current subscribers can read the report here. Join the conversation about this story »
This is a preview of a five-part slide deck from Business Insider Intelligence. To learn more about...This is a preview of a five-part slide deck from Business Insider Intelligence. To learn more about Business Insider Intelligence, click here. The pace of change in financial services has never been faster. In only the first quarter of 2019, Apple Card sent a shock wave through the credit card space, FIS' $35 billion Wirecard acquisition set a record in the payments industry, and Fifth Third's acquisition of MB Financial minted a new top-five bank. Looking ahead, the mix of investor capital, sweeping global regulations, technological developments, and financial services globalization will promise to ignite more major developments before the year ends. The incumbent banking and payment providers presiding over this landscape will face a mounting challenge to keep up. Firms must stay ahead of technology demands, preserve their bottom lines, grow their customer bases, and stay on the right side of regulators. Meanwhile, fintech threats keep growing in scale and breadth, buoyed by disruptive business models, agility, an advantageous regulatory position, and low overhead. These companies are reaching ever further across the financial services value chain, from banking to insurance, wealth management, and payments. In THE FUTURE OF FINTECH 2019, Business Insider Intelligence's fintech research team analyzes the five most important megatrends reshaping financial services with detailed data, analysis, and and actionable insights for financial services providers. Here are some key takeaways from the 130+ slide deck: New geographical fintech centers, investor focus on late-stage mega-rounds, and the emergence of specialized fintech funds are driving a surge in funding. The global open banking movement, led by regulators in most countries and industry players in some, is reshaping financial services and winning strategies to take advantage of this shift are emerging. As fintechs and tech companies are broadening their payments and banking offerings beyond core services, incumbent firms are forced to shore up their defenses. Increasing regulatory scrutiny is driving change in the financial services industry, making winners and losers of incumbents, entrants, and consumers. Technologies like AI and blockchain are moving from hype to reality, creating threats and opportunities. In full, the deck: Analyzes the five largest megatrends shaping financial services Identifies the best-of-breed providers getting ahead of industry developments Outlines key strategies other firms can use to mirror their success Interested in getting the full report? Here are two ways to access it: Purchase & download the full report from our research store. >>Purchase & Download Now Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of Fintech. The companies mentioned in the report are: Apple, Alibaba, Amazon, Ant Financial, Bank of America, Barclays, BBVA, BNP Paribas, BPCE, Brex, Credit Suisse, Circle, Citi, Clover, Danske Bank, Facebook, Fidelity, Flipkart, Grab, Goldman Sachs, Google, HSBC, IBM, ING Lemonade, JPMorgan Chase, MarketInvoice, Monzo, MUFG, N26, Nubank, OnDeck, Paypal, Paytm, PensionBee, Plaid, Policybazaar, PNC, R3, RBS, Ribbit Capital Robinhood, TransferWise, Toss, Simudyne, SBI Holdings, Square, SoftBank, Starling, Viola Group, Wealthify, Wealthsimple, and Wells Fargo, among others Join the conversation about this story »
THE EVOLUTION OF THE US NEOBANK MARKET: Why the US digital-only banking space may finally be poised for the spotlight
This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service....This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Neobanks, digital-only banks that aren’t saddled by traditional banking technology and costly networks of physical branches, have been working to redefine retail banking in major markets around the world. Driven by innovation-friendly regulatory reforms, these companies have especially gained traction in Europe over the last three years. While the US is home to some of the oldest neobanks — including Simple, which set up shop in 2009, and Moven, which was founded in 2011 — the country's neobank ecosystem has lagged behind its European counterpart. That’s largely because of an onerous regulatory regime, which has made it very difficult to obtain a banking license, and the entrenched position incumbents hold in the financial lives of US consumers. Navigating the tedious and costly scheme for obtaining a banking charter and appropriate approvals has been a major stumbling block for the country’s digital banking upstarts. However, developments over the past year suggest these startups are finally poised for the spotlight in the US. In this report, Business Insider Intelligence maps out the factors contributing to this shifting tide, examines how key players are positioning themselves to take advantage, and explores how incumbents can embark on their own digital transformations to stave off disruption. The companies mentioned in this report are: Aspiration, Chime, Goldman Sachs' Marcus, JPMorgan Chase's Finn, N26, and Revolut. Here are some of the key takeaways from the report: Despite lagging behind Europe, recent developments suggest that neobanks are finally ready for the spotlight in the US. Three distinct influences are responsible for creating the fertile ground for this evolution: regulation, shifting consumer attitudes, and the activity of incumbent banks. Among those driving this evolution in the US are foreign neobanks including Germany’s N26 and UK-based Revolut. Meanwhile, two notable incumbent-owned outfits have deployed amid great fanfare: Marcus by Goldman Sachs and Finn by Chase. In this increasingly competitive landscape, incumbent banks have a range of strategic options at their disposal, including overhauling their entire business for the digital era. In full, the report: Details the factors contributing to a shift in the US' neobank market. Explains the different operating models neobanks in the US are deploying to roll out their services and meet consumer demands. Highlights how incumbent banks are tapping into the advantages offered by stand-alone digital outfits. Discusses the key strategies established players need to deploy to remain relevant in the US' increasingly digital banking landscape. Interested in getting the full report? Here are two ways to access it: Purchase & download the full report from our research store. >>Purchase & Download Now Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of Fintech.SEE ALSO: Latest fintech industry trends, technologies and research from our ecosystem report Join the conversation about this story »