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Millennials and Finance - US - April 2017

Published By :

Mintel

Published Date : Apr 2017

Category :

Banking

No. of Pages : N/A

As Millennials continue down their financial journey, reaching this group will require going beyond generational marketing to target these consumers within their specific life stage. Millennials are between the ages of 22 and 39 (turning 40 in 2017) and, as such, represent a mixed group of consumers, experiencing a number of different major life milestones.

Table of Content

OVERVIEW
What you need to know
Definition

EXECUTIVE SUMMARY
The issues
Urban and suburban Millennials drifting away from the bank branch
Figure 1: Banking preferences, by geographic area, December 2016
Saving for emergencies a struggle
Figure 2: Top five financial challenges for Millennials, December 2016
AI awareness exceeds Millennials’ willingness to use it
Figure 3: Awareness or usage of artificial intelligence in finance, December 2016
Only half of Millennials confident in their financial knowledge
Figure 4: Confidence in financial services knowledge, December 2016
Millennials still have doubts about banks’ trustworthiness
Figure 5: Bank brand perceptions – Traditional, stable, trustworthy, December 2016
The opportunities
Younger Millennial males value customer service over interest rate
Figure 6: Preference for customer service over high interest rate, by age and gender, December 2016
Millennials aspire to spend money on experiences, not things
Figure 7: Preference to spend money on experiences, December 2016
More than half of Millennials think money will bring happiness
Figure 8: Agreement that money will buy happiness, December 2016
Financial technology improvements welcome
Figure 9: Convenience of financial technology improvements, December 2016
What it means

THE MARKET – WHAT YOU NEED TO KNOW
The Millennial generation is the largest in the US
Millennials are more diverse than prior generations, but less than those up-and-coming
Average Millennial salary tops $60,000
More than a quarter are still paying student loans
Majority of Millennials have checking or savings account

MARKET SIZE
The Millennial generation is the largest in the US
Figure 10: Share of population by generation, 2017
Millennials are more diverse than prior generations, but less than those up-and-coming
Figure 11: Distribution of generations, by race, 2017
Figure 12: Distribution of generations, by Hispanic origin, 2017
Men and women almost equal percentages in Millennial generation
Figure 13: Population by gender and generation, 2017

MARKET FACTORS
Millennials head nearly 20% of households
Figure 14: Number of households, by age of householder, 2006 and 2016
Millennial households with children make up 50% of all households with children
Figure 15: Households with own children under age 18, by age of householder, 2016
Continued uncertainty toward generation’s financial future
Figure 16: Opinion toward Millennials’ financial future, December 2016
The average Millennial salary tops $60,000
Figure 17: Average income and average expenditures, by age, 2015
Financial services account ownership
Majority of Millennials have checking or savings account
Figure 18: Account ownership – Banking products, December 2016
Black Millennials less likely to own any financial account
Figure 19: Account ownership – Banking products, by race/ethnicity, December 2016
Millennial card holders most likely to own a Visa
Figure 20: Credit card ownership – American Express, Discover, MasterCard and Visa - one or more cards, October 2015-November 2016
More than a quarter are still paying student loans
Figure 21: Account ownership – Savings and loan products, December 2016
Millennial parents looking to build savings through investments
Figure 22: Account ownership – Investment products, by presence of children in household, December 2016

KEY TRENDS – WHAT YOU NEED TO KNOW
Financial services brands continue to add AI, mobile technology
Mobile, desktop app reduces need for login
Financial services still seen as a mystery to half of Millennials
Fintech firms can apply for bank licenses

WHAT’S IN?
Millennials and financial technology
MasterCard launched AI machine learning product to monitor fraud
Banks continue roll-out of cardless ATMs
PayPal One Touch exceeds expectations
Credit card brands seen as more “recommended” than banks
Figure 23: Brand perception analysis – Recommended, December 2016

WHAT’S STRUGGLING?
Millennials worry about saving for unexpected costs
Figure 24: Top financial challenge – Saving for emergencies, by presence of children in household, December 2016
Figure 25: National General accident fixed-benefit mailer, February 2017
Skepticism toward using alternative financial lenders
Figure 26: Interest in using alternative lenders, December 2016
LendingTree launches new comparison platform
Half are confident in their financial services knowledge
Figure 27: Confidence in financial services knowledge, December 2016

WHAT’S NEW AND WHAT’S NEXT?
Fintech firms can apply for bank licenses
Adulting School
Ally’s “Do It Right” community
Capital One’s Credit Wise

THE CONSUMER – WHAT YOU NEED TO KNOW
Millennials generally optimistic about their current financial situation
Saving for emergencies, bill payment top of mind
Millennials believe credit card brands to be stable, trustworthy
Millennials aspire to spend money on experiences, not things

HEALTH OF CURRENT FINANCES
Millennials generally optimistic about their current financial situation
Figure 28: Current financial situation, December 2016
US Northeast region most confident in finances
Figure 29: Current financial situation, by geographic region, December 2016

CURRENT FINANCIAL CHALLENGES
Saving for emergencies, bill payment top of mind
Figure 30: Top five financial challenges for Millennials, December 2016
Figure 31: Lendingtree HELOC email, March 2017
Millennials more likely than general population to be concerned about the present
Figure 32: Biggest financial challenges, gen pop vs Millennials, December 2016
Figure 33: Wells Fargo home buying direct mail, June 2016
Millennial challenges vary based on geographic region
Figure 34: Savings and bill payment challenges, by region, December 2016
Millennial parents worry more about medical expenses, credit card debt
Figure 35: Savings and bill payment challenges, by presence of children in household, December 2016

EMBRACING TECHNOLOGY
Urban and suburban Millennials drifting away from the bank branch
Figure 36: Banking preferences, by geographic area, December 2016
AI awareness exceeds Millennials’ willingness to use it
Figure 37: Awareness or usage of artificial intelligence in finance, December 2016
Preference for personal customer service response remains
Most consumers prefer higher interest rate over better customer service
Figure 38: Preference for customer service over high interest rate, December 2016
Younger Millennial males value customer service over interest rate
Figure 39: Preference for customer service over high interest rate, by age and gender, December 2016

PAYMENT AND SPENDING BEHAVIORS
Millennial consumers more likely to save than spend extra money
Figure 40: Tendency to save or spend extra money, December 2016
Millennial Hispanics have more difficulty managing their credit
Figure 41: Difficulty managing credit or savings, by race/ethnicity, December 2016

FINANCIAL BRAND PERCEPTIONS
Bank of America considered most traditional, Chase considered stable
Figure 42: Bank brand perceptions – Traditional, stable, trustworthy, December 2016
Millennials believe credit card brands to be stable, trustworthy
Figure 43: Credit card brand perceptions, December 2016
Visa, MasterCard thought to be more innovative, personal than most banks
Figure 44: Financial brand perceptions – Personal, innovative, December 2016
Lesser known banks and lenders less trusted than more traditional, well-known

SOURCES OF FINANCIAL INFORMATION
Only half of Millennials confident in their financial knowledge
Figure 45: Confidence in financial services knowledge, December 2016
One third trust friends and family for financial information
Figure 46: Sources of financial information, by gender, December 2016
Millennial parents look to social media as well
Figure 47: Sources of financial information, by gender and presence of children in household, December 2016

ATTITUDES TOWARD FINANCES
Financial technology improvements welcome
Figure 48: Convenience of financial technology improvements, December 2016
Midwesterners most doubtful of financial technology advancements
Figure 49: Convenience of technology improvements, by region, December 2016
Security fears still present, but manageable
Figure 50: Comfort with security of financial information, December 2016
Investing in the stock market seen as risky, but necessary
Figure 51: Willingness to invest in stock market, December 2016
Those with a lower household income see less benefit in investing
Figure 52: Willingness to invest in stock market, by household income, December 2016

ATTITUDES TOWARD MONEY
Millennials aspire to spend money on experiences, not things
Figure 53: Preference to spend money on experiences, December 2016
Figure 54: Groupon Holiday online ad, December 2016
Financial success defined by ability to pay bills, have funds left over
Personal time valued more than money
Figure 55: Valuing personal time over money, by age in generation and race/ethnicity, December 2016
More than half of Millennials think money will bring happiness
Figure 56: Agreement that money will buy happiness, December 2016

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations

List of Table

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