Ten ways for financial services brands to engage with Millennials

For marketers, Millennials are a desirable group. Always on, these digitally savvy 18-33 year olds [according to research from the Pew Research Center], are brand loyal and powerful word of mouth advocates.

While they currently may not share the high earning power of other consumers (notably their baby-booming parents), that won’t be the case for much longer. Their education prospects make them likely to be the CEOs, CMOs, COOs and entrepreneurs of the future.

And while they may dislike being labelled as an audience demographic, this will not stop them being a prime target for digital marketers.

Why? Well, millennials are the first generation of digital natives – they are the only generation for which internet, social media and mobile use is something they have grown up with rather than adapted to.

This familiarity with all things tech defines how they shop. These tech-savvy teens and twenty-somethings expect to have immediate access to price comparisons, and product information and will seek out reviews from their friends, family and trusted influencers.

And it’s no surprise that fashion and sportswear brands, retailers, entertainment companies and tech companies are among the most popular brands with this group. A 2015 report by US digital ad agency, Moosylvania, revealed their top 50 brands (see diagram below). The top five were Nike, Apple, Samsung, Sony and Walmart. The most important criteria in selecting these brands were the quality of the products, how the products reflected their personality, and the social responsibility of the brand.

Financial services brands don’t resonate with Millennials

More noteworthy, however, was the fact that not a single financial brand was represented in the top 50. So what can financial services brands do to successfully interact with this important audience demographic?

Ten ways for financial services brands to engage with Millennials

1. Millennials value ease of doing business most when they are weighing up whether to do business with a brand, so focusing on a high-quality and seamless customer experience will serve banks and insurance companies well.

2. As digital natives, they are comfortable transacting online – they are turned off by the slow-moving, paper-bound processes of the traditional institutional lenders, preferring mobile and digital solutions. They will also look to interact with independent financial advisers in this way.

3.Financial services has lagged behind other brands in embracing social media to engage with their audience. There are a few exceptions such as Mastercard’s hit Valentine’s Vines, and AmEx’s aspirational content on Instagram – but brands need to be savvier in how they use social media.

4. The crash of the financial services market in both the UK and US has shaped Millennials’ attitude to traditional business borrowing, and as they become business-owners themselves, they will look to sources of alternative finance (#altfi) to fund their business and different ways of banking. According to The UK Alternative Finance Industry Report 2014 from independent UK charity, NESTA, reward, donation and equity-based crowdfunding all have great appeal with a younger audience (see diagram).

5. They don’t listen to or trust marketing from their banks. All of the UK’s Big Four banks feature in the top 10 of the least trusted brands, and 71% of Millennials would rather go to their dentist than be marketed to by their banks!

6. According to the Millennial Disruption Index, 68% of Millennials predict that in five years’ time, the way we access our cash will be completely different and 33% believe they won’t need a bank at all.

7. That said, they are keen to gain an in-depth knowledge of financial services products. Podcasts – particularly free ones from independent sites such as Motley Fool – are a great way to help educate Millennials about managing their personal finances effectively. This content will also encourage them in to entrepreneurship.

8. Millennials believe in the ‘sharing economy’ and are more inclined to trust groups of strangers– through peer recommendations, crowd-funding and sites such as AirBnB – than brands.

9. Millennials’ love of tech means they often favour digital comms to phone or face-to-face meetings. They’ll also tap in to mobile apps to improve time management and efficiency. For the heavily regulated financial services industry, this will provide a challenge.

10. They are risk averse financially (a throwback to the recession) and will look to their family and friends for a steer on buying products and services, ahead of seeking professional advice. IFAs take note – talk to the parents to talk to their children! They do some product research online, but no more than other generations.

It won't happen overnight, but acknowledging the behaviour and attitudes of this audience will serve financial brands well.