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The Millennial Migration

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<strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>:<br />

How Banks Can Remain Relevant In<br />

<strong>The</strong>ir Decision-Making Eco-System<br />

A Global Banking Consumer Survey and Report by Oracle Financial Services


Inside This Report<br />

1. Seize the <strong>Millennial</strong> Moment<br />

2. Influencers Participating in the Report<br />

3. <strong>The</strong> Many Shades of <strong>Millennial</strong>s<br />

a. <strong>Millennial</strong>s only see banking as transactional<br />

b. Can banks capitalize on <strong>Millennial</strong>s’ trust?<br />

c. <strong>Millennial</strong>s are beginning to adopt Non-Bank Transaction Modes<br />

d. Young and Mature <strong>Millennial</strong>s together wield the biggest influence<br />

e. Mobile-First experience for the “Always-On” generation<br />

4. <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong> to Non-Bank Transaction Modes – Measuring the Shift<br />

5. Moments that Matter: <strong>Millennial</strong>s’ Life Moments<br />

a. Integrating Life Moments and banking<br />

b. A needs-based approach will win the hearts of <strong>Millennial</strong>s<br />

c. 5 lifestyle services <strong>Millennial</strong>s want from banks<br />

d. Breaking into <strong>Millennial</strong>s’ digital space<br />

6. <strong>The</strong> Human-Centric Design to Win <strong>Millennial</strong>s<br />

a. Adopt a Mobile-First approach<br />

b. Make every customer experience feel personal<br />

c. Look out for Partnerships<br />

7. Team Behind the Report & Acknowledgements


1. Seize the <strong>Millennial</strong> Moment<br />

<strong>Millennial</strong>s are the largest generation in world history, numbering 80 million 1 and<br />

commanding $1.3 trillion 2 in direct annual spending in the U.S. alone. <strong>The</strong>y now represent<br />

a mainstream banking demographic with ever-increasing financial power. Having grown up<br />

in an App society, their expectations are changing the game for almost every industry on<br />

the planet and banking is no exception.<br />

$<br />

As the largest consumer base for banks, an examination of where and how <strong>Millennial</strong>s are<br />

making their financial decisions presents immense opportunity for banks and FinTech<br />

startups (“FinTechs”), to build an eco-system of compelling digital experiences that<br />

seamlessly integrates into <strong>Millennial</strong>s’ lifestyles. That’s why we set about surveying 4,646<br />

respondents across 9 markets – Brazil, Canada, China, France, Germany, India, Japan, UK<br />

and the U.S. to get a view on how financial institutions can enable their highly digital &<br />

mobile lifestyles.<br />

This report takes a closer look at the milestones in <strong>Millennial</strong>s’ lives that matter most, what<br />

we call ‘Life Moments’, and who they are most likely to engage with around them. <strong>The</strong>se<br />

moments provide the inspiration for what we believe is a new model for lifestyle banking:<br />

One that propels banks from a transactional platform or service provider, to a loyalty and<br />

trust-invoking brand that is seamlessly integrated with the <strong>Millennial</strong>s’ lifestyle.<br />

<strong>The</strong>re is immense opportunity for banks to be a major digital<br />

player seamlessly integrated into <strong>Millennial</strong>s’ lifestyles.<br />

1 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


2. Influencers Participating in the Report<br />

DAVID M. BREAR<br />

Co-Founder and CEO<br />

11:FS<br />

ROB FINDLAY<br />

Founder<br />

Next Bank<br />

David is a Banking & FinTech strategist, speaker, scholar, writer and VC. One of the most<br />

influential people in Banking & FinTech globally, he established 11:FS to become a subject<br />

matter expertise led source of benchmarking, research, advice and investment, and<br />

recently launched an investment fund with Chris Skinner and Life.SREDA. His experience<br />

with top financial services global brands gives David a truly unique vantage point on the<br />

FinTech and Banking industry.<br />

Rob is the founder of Next Bank and leads the group wide UX practice at DBS Bank in<br />

Singapore. Prior to this, he was Director of Innovation for BlackBerry Asia Pacific. Rob<br />

began his career in the creative industry, running his own brand and design company.<br />

Transitioning to financial services, Rob led the customer experience for National Australia<br />

Bank’s direct banking channels, and led a culture change programme at OCBC.<br />

@davidbrear<br />

https://www.linkedin.com/in/davidbrear<br />

@robfindlay<br />

https://www.linkedin.com/in/robfindlay<br />

AMIT GOEL<br />

Co-Founder<br />

Let’s Talk Payments (LTP)<br />

SCARLETT SIEBER<br />

SVP, Global Business Development,<br />

New Digital Businesses<br />

BBVA<br />

Amit is the Co-Founder and Managing Director of Let's Talk Payments (LTP). At LTP, he<br />

provides the same level of analytical rigor that analysts put into their work combined with<br />

Content 2.0 technology to offer unparalleled satisfaction for readers in the FinTech space.<br />

Listed as one of 2015’s Top 100 Influencers and Brands in FinTech by Onalytica, Amit is<br />

currently building a FinTech Market Network called MEDICI along with the LTP team. He<br />

has a rich background in advising a wide variety of clients in FinTech, commerce and<br />

technology space.<br />

Scarlett secures partnerships and opportunities within the BBVA ecosystem, and is the US<br />

lead for BBVA's millennial initiative. She is also the face of BBVA when it comes to<br />

speaking roles, mentorship in national accelerators, and judging startup competitions. A<br />

regular contributor to Huffington Post, Forbes, and WeWork, Scarlett is also a NYC Fellow<br />

of Startup Leadership Program and has been named amongst the top 50 most influential<br />

people in FinTech by Onalytica in 2015.<br />

@amitTwitr<br />

https://www.linkedin.com/in/amitpayments<br />

@ScarlettSieber<br />

https://www.linkedin.com/in/scarlettsieber<br />

Disclaimer: <strong>The</strong> above influencers contributed to this report in their personal capacity. <strong>The</strong> views expressed are their own, and do not necessarily represent the views of their organizations, of Oracle, or of Wharton FinTech.<br />

2 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


3. <strong>The</strong> Many Shades of <strong>Millennial</strong>s<br />

We define <strong>Millennial</strong>s as four sub-sets: Young <strong>Millennial</strong>s, aged 18-21; Middle<br />

<strong>Millennial</strong>s, aged 22-25; Mature <strong>Millennial</strong>s, aged 26-30; and Grey <strong>Millennial</strong>s, aged<br />

between 31 and 45 years old.<br />

Grouping <strong>Millennial</strong>s by age reveals nuances in their behaviour towards banks and how<br />

they approach financial transactions.<br />

We will look at <strong>Millennial</strong>s through 3 user personas - meet siblings Amy, Brian and Nicole;<br />

home together for the first time in a year and a half.<br />

Bringing the 3 siblings together highlights important differences in their current banking<br />

attitudes and lifestyle priorities. Our findings uncover the nuances in their preferences on a<br />

number of dimensions, which differ by age and location. <strong>The</strong>se are some of the key<br />

takeaways.<br />

We polled more than 4,500 respondents in 9<br />

markets – Brazil, Canada, China, France, Germany,<br />

India, Japan, UK and the U.S.<br />

24%<br />

Age 31 - 45 : Grey <strong>Millennial</strong>s<br />

15%<br />

Age 46+ : Non-<strong>Millennial</strong>s<br />

27%<br />

Age 26 - 30 : Mature <strong>Millennial</strong>s<br />

<strong>The</strong>re are important differences in the way <strong>Millennial</strong>s think<br />

about and approach financial transactions, depending on<br />

whether they are Young, Middle, Mature, or Grey.<br />

11%<br />

Age 18 - 21 : Young <strong>Millennial</strong>s<br />

23%<br />

Age 22 - 25 : Middle <strong>Millennial</strong>s<br />

Meet the <strong>Millennial</strong>s’ Personas<br />

Name : Amy (Young <strong>Millennial</strong>)<br />

Age : 19<br />

Lives in : New York City<br />

Job : Student<br />

Likes : Snapchat, Venmo, Instagram<br />

Amy is a Digital Native who grew up in an App culture and<br />

documents her every move online, she is extremely reliant on her<br />

social network for key decisions which currently revolves around<br />

her graduation trip.<br />

Name : Brian (Middle <strong>Millennial</strong>)<br />

Age : 23<br />

Lives in : Shanghai<br />

Job : Brand Manager<br />

Likes : AirBnb, payWave, Spotify<br />

Brian is a Digital Enthusiast who sports the latest technology and<br />

innovations. He spends most of his free time online, researching<br />

his next career move.<br />

Name : Nicole (Mature <strong>Millennial</strong>)<br />

Age : 28<br />

Lives in : Paris<br />

Job : Lawyer<br />

Likes : Pinterest, Net-a-porter, Luxury goods<br />

Nicole is a Digital Convert but is much more selective about her<br />

digital eco-system and relies on trusted advice especially with<br />

planning her upcoming wedding and honeymoon.<br />

3 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


a. <strong>Millennial</strong>s only see banking as transactional<br />

Most <strong>Millennial</strong>s maintain a transactional relationship with their banks, regarding them as<br />

primarily a safe place to store money. This was most prevalent amongst Young <strong>Millennial</strong>s,<br />

91% of which do not view banks as a lifestyle-enabling institution.<br />

Which statement do <strong>Millennial</strong>s (Age 18 – 45) see as<br />

the most accurate?<br />

Consumers are already running out of patience at<br />

banks' lack of adaptation to a new digital future;<br />

voting with both their wallets and their notion of trust.<br />

<strong>The</strong> statistic that 60% trust banks (and is probably<br />

declining) rocks the very assumption and currency<br />

banks have around their role in the global economy.<br />

My bank is a safe place<br />

to keep my money<br />

60%<br />

DAVID M. BREAR<br />

ROB FINDLAY<br />

Banks’ motivation for investing in digital banking has<br />

been driven by cost reduction, resulting in<br />

underwhelming experiences being delivered.<br />

<strong>Millennial</strong>s want more and banks need to wake up<br />

before alternatives gain real pace.<br />

My bank helps me to manage<br />

my personal finances<br />

My bank helps to support<br />

my lifestyle<br />

31%<br />

9%<br />

4 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


. Can banks capitalize on <strong>Millennial</strong>s’ trust?<br />

<strong>Millennial</strong>s also trust their banks on matters regarding personal finances if such advice<br />

were provided. An overwhelming 88% indicated so, above family / friends and personal<br />

financial advisors.<br />

Banks are still the most trusted source for advice<br />

on personal finances<br />

<strong>The</strong>se observations reflect the potential for banks to evolve into a bigger player in<br />

<strong>Millennial</strong>s’ lives. <strong>The</strong>y can capitalize on the high level of trust that <strong>Millennial</strong>s currently<br />

have in them for providing personal financial advice, and design customized products and<br />

services that would enable <strong>Millennial</strong>s to make their decisions easily and seamlessly<br />

without leaving their digital eco-system.<br />

Banks<br />

88%<br />

With banks maintaining a high level of trust in holding funds<br />

and managing personal finances, this trust can be built upon<br />

through the design of products and services that integrate<br />

seamlessly with <strong>Millennial</strong>s’ lives.<br />

Other Sources:<br />

Family /<br />

Friends<br />

20% 40% 60% 80%<br />

87%<br />

Personal<br />

Financial<br />

Advisors<br />

59%<br />

Online<br />

Forums 35%<br />

Online<br />

Financial<br />

Advisors<br />

31%<br />

Qn: Thinking about seeking advice on your personal finances, please indicate 3 of the<br />

following sources that you would trust the most?<br />

5 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


c. <strong>Millennial</strong>s are beginning to adopt Non-Bank Transaction Modes<br />

While traditional payment methods are still the primary platforms for transactions,<br />

<strong>Millennial</strong>s are increasingly showing affinity towards non-bank alternatives.<br />

Currently, the most frequently used payment modes are cash, bank cards and online<br />

banking, which registered significantly higher usage (79%, 76%, and 71% respectively)<br />

than non-bank alternatives such as alternative payment providers (like PayPal) or mobile<br />

wallets.<br />

Mature <strong>Millennial</strong>s (Age 26 - 30) are most likely to<br />

have used non-bank options than any other age group<br />

Highest percentage of respondents who have used non-bank options<br />

Yet we also found that non-bank options are gaining greater traction with <strong>Millennial</strong>s,<br />

where the older the <strong>Millennial</strong>, the higher the likelihood of trying an alternative payment<br />

method, with these alternatives being most popular amongst Mature <strong>Millennial</strong>s.<br />

While traditional payment methods are still primarily in use,<br />

non-bank options are gaining traction amongst Mature<br />

<strong>Millennial</strong>s, who are most willing to consider alternatives.<br />

Close to 70% of the Indian Internet population are<br />

<strong>Millennial</strong>s, who are driving the mobile wallet adoption<br />

in India estimated at US$2.2 billion in 2015. <strong>The</strong><br />

mobile payments market in China is estimated to be<br />

over US$180 billion. <strong>The</strong> average age of Yu’e Bao’s<br />

(Alipay’s investment platform) nearly 50 million users<br />

49%<br />

Age 31 - 45<br />

26%<br />

Age 26 - 30<br />

18%<br />

Age 26 - 30<br />

7%<br />

Age 26 - 30<br />

is currently 28.<br />

AMIT GOEL<br />

Alternative Payment<br />

Providers (e.g. Paypal)<br />

Mobile Wallet<br />

Mobile Money<br />

Peer-to-Peer Payment<br />

Platforms (e.g. Venmo)<br />

Qn: Which of the following methods have you used in the last 6 months to make a financial<br />

transaction?<br />

6 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


d. Young and Mature <strong>Millennial</strong>s together wield the biggest influence<br />

In particular, Mature <strong>Millennial</strong>s are more likely to use mobile wallet and mobile money, while Young <strong>Millennial</strong>s prefer peer-to-peer payment platforms and alternative payment providers.<br />

Together, Young and Mature <strong>Millennial</strong>s being increasingly open to non-traditional modes of payment and maintaining substantial buying power represents a large financial opportunity for<br />

banks to offer and monetize new payment products and services for these groups.<br />

Young <strong>Millennial</strong>s (Age 18 – 21) have the highest preference for Alternative Payment Providers and<br />

Peer-to-Peer Payment while Mature <strong>Millennial</strong>s (Age 26 – 30) have the highest preference for Mobile Wallet<br />

and Mobile Money<br />

Percentage of <strong>Millennial</strong>s (Age 18 – 45) who prefer non-bank options against Non-<strong>Millennial</strong>s (Age 46 & above)<br />

40%<br />

Age 18 - 45<br />

36%<br />

Age 46+<br />

19%<br />

Age 18 - 45<br />

7%<br />

Age 46+<br />

11%<br />

Age 18 - 45<br />

4%<br />

Age 46+<br />

4%<br />

Age 18 - 45<br />

1%<br />

Age 46+<br />

Alternative Payment<br />

Providers (e.g. Paypal)<br />

Mobile Wallet<br />

Mobile Money<br />

Peer-to-Peer Payment<br />

Platforms (e.g. Venmo)<br />

Qn: Which of the following is your preferred transaction mode? Select the top 3.<br />

7 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


e. Mobile-First experience for the "Always-On" generation<br />

Globally, 68% of <strong>Millennial</strong>s chose Mobile or Desktop as their most frequent channel of<br />

interaction with their banks. In the U.S. alone, 75% of <strong>Millennial</strong>s are cited to be at least<br />

somewhat reliant on mobile banking to manage their accounts, and more than one quarter<br />

completely rely on it. 3<br />

More than 68% of all <strong>Millennial</strong>s say Desktop or<br />

Mobile is their most frequent channel of<br />

interaction with their Banks<br />

Corresponding with <strong>Millennial</strong>s’ high dependence on mobile are their equally high<br />

expectations for their digital experiences. <strong>The</strong>re is a general sentiment that banking<br />

applications can be improved, a finding supported by SNL Financial who also found that<br />

that 53% of <strong>Millennial</strong>s see their mobile banking applications lacking, with 54% of that<br />

group saying they would switch providers if the alternative offered better applications. 4<br />

Desktop<br />

38%<br />

Age 18 - 21<br />

38%<br />

Age 22 - 25<br />

41%<br />

Age 26 - 30<br />

47%<br />

Age 31 - 45<br />

With most of their interactions going digital, the future of<br />

digital banking belongs to banks who develop banking<br />

applications with a Mobile-First mindset.<br />

Mobile<br />

29%<br />

Age 18 - 21<br />

30%<br />

Age 22 - 25<br />

28%<br />

Age 26 - 30<br />

24%<br />

Age 31 - 45<br />

Younger <strong>Millennial</strong>s are more likely to use mobile devices when interacting with their banks<br />

<strong>Millennial</strong>s expect a better ability to multitask, to save<br />

time and money. <strong>The</strong>y want mobile products and<br />

experiences that enable them to do things in two to<br />

four clicks.<br />

Other Channels of Interaction with Banks (by age groups)<br />

16%<br />

19% 18%<br />

17%<br />

6%<br />

5% 4% 3%<br />

AMIT GOEL<br />

Branch<br />

Mail<br />

Banks need to stop treating mobile banking as a<br />

dumbed-down version of Internet banking. It should<br />

be the centre of all customer touch points.<br />

6% 7%<br />

6%<br />

5% 4%<br />

4% 5% 4%<br />

Phone<br />

Retail Store<br />

DAVID M. BREAR<br />

Qn: Rank how often you interact with your bank through the following channels.<br />

8 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


4. <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong> to Non-Bank Transaction Modes – Measuring the Shift<br />

<strong>Migration</strong> Maturity Index<br />

- Low<br />

- Moderate<br />

- High<br />

Only 10% have<br />

used Mobile<br />

Wallet which is<br />

less than half of<br />

the global average<br />

of 23%.<br />

50% selected<br />

Alternative Payment<br />

Providers (like Paypal) as<br />

one of their Top 3<br />

preferred transaction<br />

modes.<br />

Out of the 9 markets, Germany<br />

has the highest ratio of <strong>Millennial</strong>s<br />

(69%) who have used Alternative<br />

Payment Providers (like Paypal) in<br />

the past 6 months.<br />

When asked about their<br />

Top 3 preferred<br />

transaction modes, 23%<br />

selected Mobile Money<br />

(double the global<br />

average of 11%) and<br />

31% selected Mobile<br />

Wallet (compared to the<br />

global average of 19%)<br />

15% selected Mobile Wallet as<br />

one of their Top 3 preferred<br />

transaction modes, less than the<br />

global average of 19%.<br />

52% say Alternative Payment<br />

Providers (like Paypal) is one of their<br />

Top 3 preferred transaction modes,<br />

compared to the global average of<br />

40%. Of the 9 markets, they have<br />

the highest ratio of those aged 18 –<br />

21 (64%) who selected this.<br />

Only 8% selected Mobile<br />

Wallet as one of their Top 3<br />

preferred transaction modes,<br />

compared to the global<br />

average of 19%. Highest<br />

ratio of cheque users (60%)<br />

amongst all 9 markets.<br />

24% and 38%<br />

have used Mobile<br />

Money and<br />

Mobile Wallet<br />

respectively in the<br />

past 6 months.<br />

Out of the 9 markets,<br />

China has the highest<br />

ratio of <strong>Millennial</strong>s<br />

who have used Mobile<br />

Money (46%) and<br />

Mobile Wallet (60%) in<br />

the past 6 months.<br />

43% of all Young <strong>Millennial</strong>s prefer Alternative Payment Providers and 6% of them prefer Peer-to-Peer Payment Platforms, more than any other age group.<br />

22% of all Mature <strong>Millennial</strong>s prefer Mobile Wallet and 14% of them prefer Mobile Money, more than any other age group.<br />

9 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


5. Moments that Matter: <strong>Millennial</strong>s’ Life Moments<br />

<strong>The</strong> way for banks to integrate into <strong>Millennial</strong>s’ lifestyles is to examine where and how<br />

<strong>Millennial</strong>s are making their financial decisions. By looking at data, such as spending<br />

patterns, and launching surveying effort to identify the most relevant moments in a<br />

customer’s life, banks gain valuable insight on where to focus their new product<br />

development efforts. <strong>The</strong>se moments that matter are what we refer to as Life Moments,<br />

ranging from daily shopping & budgeting, to major commitments like finding a new job and<br />

planning a vacation.<br />

As the nature of spending priorities differs between Young, Middle, Mature and Grey<br />

<strong>Millennial</strong>s, we sought to understand their top 3 Life Moments to identify where these<br />

priorities lie.<br />

Top 3 Life Moments Selected By <strong>Millennial</strong>s<br />

Young <strong>Millennial</strong>s (Age 18 - 21)<br />

Deciding on a College<br />

/ Furthering Studies<br />

Finding a New Job<br />

Planning a Vacation<br />

31%<br />

19%<br />

16%<br />

Depending on what stage of their life they are in, we find <strong>Millennial</strong>s globally prioritizing<br />

their expenditure decisions according to these top 3 Life Moments: Planning a vacation<br />

(25%), Finding a new job (17%) and Daily shopping and budgeting (16%).<br />

Middle <strong>Millennial</strong>s (Age 22 - 25)<br />

Finding a New Job<br />

22%<br />

Top Life Moments for <strong>Millennial</strong>s differ by age. Banks are in the<br />

best position to align data and provide customers with financial<br />

services regardless of which stage they are in their life.<br />

Planning a Vacation<br />

Deciding on a College<br />

/ Furthering Studies<br />

21%<br />

14%<br />

Mature <strong>Millennial</strong>s (Age 26 - 30)<br />

Planning a Vacation<br />

Daily Shopping<br />

& Budgeting<br />

Finding a New Job<br />

26%<br />

17%<br />

15%<br />

Qn: Which of the following life moments appeal most to your lifestyle right now? Select 1 only.<br />

10<br />

<strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


a. Integrating Life Moments and banking<br />

<strong>Millennial</strong>s are, at best, lukewarm regarding the current ability of banks to help them in<br />

their Life Moments, with less than 10% of them seeing their bank as helping to support<br />

their lifestyle.<br />

A silver lining is that <strong>Millennial</strong>s, especially Grey <strong>Millennial</strong>s, are ready to interact and<br />

engage with banks in new ways. Banks are their third most trusted source for<br />

information and advice when making decisions related to Life Moments, compared to<br />

their social network of family / friends, as well as search engines – a finding more<br />

pronounced in older <strong>Millennial</strong>s than younger ones. <strong>Millennial</strong>s would, however, rather<br />

turn to banks than media outlets, non-bank payment providers and retailers.<br />

Ranking of Sources when Making Decisions by<br />

preference<br />

1<br />

2<br />

3<br />

4<br />

Young <strong>Millennial</strong>s (Age 18 – 21) Middle <strong>Millennial</strong>s (Age 22 – 25)<br />

Family / Friends<br />

Search Engines<br />

Social Networks<br />

Banks<br />

1<br />

2<br />

3<br />

4<br />

Search Engines<br />

Family / Friends<br />

Social Networks<br />

Banks<br />

5<br />

Media Outlets<br />

5<br />

Media Outlets<br />

<strong>The</strong>re is a huge opportunity for banks to move up the<br />

ranks through the twin principles of transparency and<br />

simplicity.<br />

6<br />

Non-Bank Payment Providers<br />

6<br />

Non-Bank Payment Providers<br />

7<br />

Retailers<br />

7<br />

Retailers<br />

Mature <strong>Millennial</strong>s (Age 26 – 30) Grey <strong>Millennial</strong>s (Age 31 – 45)<br />

SCARLETT SIEBER<br />

1<br />

Search Engines<br />

1<br />

Family / Friends<br />

2<br />

Family / Friends<br />

2<br />

Search Engines<br />

3<br />

Social Networks<br />

3<br />

Banks<br />

4<br />

Banks<br />

4<br />

Media Outlets<br />

5<br />

Non-Bank Payment Providers<br />

5<br />

Social Networks<br />

6<br />

Media Outlets<br />

6<br />

Non-Bank Payment Providers<br />

7<br />

Retailers<br />

7<br />

Retailers<br />

Qn: Whom would you like to help you prepare for or make decisions related to the selected life<br />

moment?<br />

11 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


<strong>Millennial</strong>s are also willing to explore new products and services by their banks aimed at a<br />

broader set of lifestyle and financial needs. 51% are likely or very likely to try new services<br />

offered by their bank, and a further 28% are neutral.<br />

51% said they are ‘Likely’ or ‘Very Likely’ to try new services<br />

related to life moments<br />

When asked if they would be receptive to banks offering ways to help them prepare for<br />

Life Moments, the answer was a resounding ‘Yes’.<br />

60%<br />

However, the bad news is the propensity to engage with these new types of services<br />

decreases with the younger <strong>Millennial</strong>s. Young <strong>Millennial</strong>s are the least receptive to new<br />

services offered by their banks, having grown up in an environment where the<br />

decision-making eco-system is more fiercely competitive than that of Mature <strong>Millennial</strong>s.<br />

50%<br />

<strong>Millennial</strong>s currently do not see their bank as<br />

lifestyle-enabling, but are resoundingly open to banks<br />

offering new ways to help them prepare for Life Moments.<br />

Banks have to move swiftly before the opportunity is lost.<br />

40%<br />

<strong>Millennial</strong>s may be willing to try new services, but<br />

they have equally high expectations and are less<br />

forgiving of poor execution and user experience.<br />

Banks need to provide a customer experience of a<br />

higher level than what they are delivering now.<br />

DAVID M. BREAR<br />

0%<br />

Age 31 - 45 Age 26 - 30 Age 22 - 25 Age 18 - 21<br />

Percentage of Respondents who said they are 'Likely' or 'Very Likely' to try new services by<br />

their bank<br />

12 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


. A needs-based approach will win the hearts of <strong>Millennial</strong>s<br />

<strong>Millennial</strong>s struggle to make decisions and plan for these Life Moments and the top<br />

challenges they face in making these decisions are Choices, Affordability, and Experience.<br />

Consider Amy’s graduation trip planning process. As she searches through the vast price<br />

comparison sites and customer reviews available, she cannot help but feel that she may<br />

make the wrong choice.<br />

Top Decision-Making Challenges faced by <strong>Millennial</strong>s<br />

during Key Life Moments are related to Choices,<br />

Affordability and Lack of Experience<br />

Banks can take this opportunity to provide contextual banking solutions by integrating<br />

their products and services into <strong>Millennial</strong>s’ decision-making process during key Life<br />

Moments such as the one Amy is facing. In this instance, this data-driven banking<br />

approach could have helped Amy with the heavy-lifting when planning her vacation; by<br />

providing recommendations based on her financial position, made relevant with data from<br />

her previous trips and like-minded customer reviews.<br />

Planning a Vacation<br />

47% said “I have too many<br />

choices” and 35% said “I’m<br />

not sure I can afford this”<br />

With the customer data they already have, banks are in a prime<br />

position to provide <strong>Millennial</strong>s clarity when making important<br />

financial decisions.<br />

Finding a New Job<br />

36% said “I don’t have<br />

experience with this” and<br />

35% said “I don’t know how<br />

to start”<br />

Daily Shopping<br />

& Budgeting<br />

44% said “I have too many<br />

choices” and 35% said “I’m<br />

not sure I can afford this”<br />

Qn: Select the primary challenges associated with the selected life moment. You can select as many<br />

as applicable.<br />

13 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


c. 5 lifestyle services <strong>Millennial</strong>s want from banks<br />

<strong>The</strong> top 5 services <strong>Millennial</strong>s were the most positive about that banks could potentially<br />

offer are: 1) Discounts at relevant stores; 2) Checklists for tasks related to life events; 3)<br />

Recommendations based on customers like them; 4) Professional / expert reviews; and 5)<br />

Budgeting Tools or content. <strong>The</strong>re is clear synergy between <strong>Millennial</strong>s’ preference for<br />

these services and the functions they serve addressing the top 3 challenges with<br />

<strong>Millennial</strong>s’ Life Moments that we identified earlier – Choices, Affordability, and<br />

Experience.<br />

Top 5 New Services with Highest Percentage of <strong>Millennial</strong>s<br />

who said they are ‘Likely’ or ‘Very Likely’ to try it<br />

57% 55%<br />

Discounts at<br />

Relevant Stores<br />

Checklists For Tasks<br />

Related To Life Moment<br />

54%<br />

Recommendations Based<br />

On Customers Like <strong>The</strong>m<br />

53% 52%<br />

Professional / Expert Reviews<br />

Budgeting Tools or Content<br />

Qn: How likely would you be to try the following services if your bank offered them to help you<br />

with this life moment?<br />

14 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


d. Breaking into <strong>Millennial</strong>s’ digital space<br />

Banks do not currently figure into <strong>Millennial</strong>s’ thought process when it comes to their life<br />

moments. Nor is the current digital banking experience they are providing <strong>Millennial</strong>s up to<br />

mark.<br />

<strong>The</strong> younger the <strong>Millennial</strong>, the less satisfied they are<br />

with their digital banking experience<br />

<strong>Millennial</strong>s are digitally savvy – the younger they are, the more so – and they live in a digital<br />

eco-system where other non-bank players are more prominent. Banks have stiff<br />

competition and high benchmarks to consider, which is why younger <strong>Millennial</strong>s are less<br />

satisfied with their experience with digital banking than older <strong>Millennial</strong>s.<br />

Banks need to demonstrate new capabilities and transform their relationships with<br />

younger <strong>Millennial</strong>s in order to rise above the clutter and remain relevant.<br />

This is not an insurmountable task, having the twin advantages of still being regarded as<br />

important, as well as younger <strong>Millennial</strong>s’ affinity with the digital space. <strong>The</strong> way to gain<br />

trust – which we define in this context as banks’ ability to meet <strong>Millennial</strong>s’ needs for key<br />

life moments, rather than banks’ ability to store their money – is to provide timely digital<br />

services made absolutely relevant by the wealth of data held on that customer.<br />

Age 18 - 21<br />

Age 22 - 25<br />

Age 26 - 30<br />

Age 31 - 45<br />

Poor<br />

Excellent<br />

37% rated 1 - 3<br />

63% rated 4 - 5<br />

20% 40% 60% 80%<br />

Poor<br />

Excellent<br />

35% rated 1 - 3<br />

65% rated 4 - 5<br />

20% 40% 60% 80%<br />

Poor<br />

Excellent<br />

33% rated 1 - 3<br />

67% rated 4 - 5<br />

20% 40% 60% 80%<br />

Poor<br />

Excellent<br />

30% rated 1 - 3<br />

70% rated 4 - 5<br />

<strong>The</strong> younger the <strong>Millennial</strong>, the less satisfied they are with their<br />

digital banking experience. Banks have to look before they leap<br />

into the digital game because they only get one shot with<br />

<strong>Millennial</strong>s. <strong>The</strong>y are more digitally savvy and their standards<br />

are high, being familiar with other digital players who have set<br />

benchmarks. Banks need to consider how well they can design<br />

and deliver these products and services in this competitive<br />

environment.<br />

20% 40% 60% 80%<br />

Qn: On a scale from 1 – 5, how would you rate your existing digital banking experiences?<br />

15 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


6. <strong>The</strong> Human-Centric Design to Win <strong>Millennial</strong>s<br />

<strong>The</strong> key to building trust and emotional rapport with <strong>Millennial</strong>s is to develop products<br />

which would help them mitigate their top associated challenges in making decisions and<br />

planning for their Life Moments: Challenges such as Choices, Affordability, and<br />

Experience.<br />

Take Mint, an app which is experiencing rapid adoption among <strong>Millennial</strong>s in the U.S. A<br />

free, web and mobile-based personal finance application, Mint enables consumers to<br />

spend smarter and save more. Mint users pull all of their accounts, cards, and investments<br />

into one place so that they can track spending, create a budget, receive bill reminders and<br />

track credit score.<br />

Because Mint makes it easy to track daily spend and makes budgeting simple and<br />

transparent, it appeals to <strong>Millennial</strong>s who do not have experience managing budgets, nor<br />

know where to start in making and achieving financial goals such as the affordability of a<br />

first home. It is also personalized, with customized tips for reducing fees and saving<br />

money based on the user profile and transactional behavior. It can also be linked to their<br />

bank account.<br />

Banks need to take a human-centric approach in their product<br />

development strategies. <strong>The</strong>y should leverage their customer<br />

data strategically to design and deliver an experience that is<br />

mobile, personalized and value-added. <strong>The</strong>y should act now,<br />

before other digital players take their place.<br />

a. Adopt a Mobile-First approach<br />

With 80%+ of <strong>Millennial</strong>s owning smartphones and 97% of those devices<br />

running on either iOS or Android, any new product should first and foremost be<br />

optimized for these media. More than just looking beautiful, a user-centric<br />

approach in both visual design and usability on a mobile and desktop platform<br />

will improve engagement, which would in turn drive relevance and trust.<br />

Banks can easily replicate Mint’s success. In taking a human or user-centric approach, they<br />

need to design an experience that reduces friction amongst all of <strong>Millennial</strong>s’ financial<br />

needs. In particular, they need to pay attention to the following development strategies.<br />

Banks that embrace a digital first approach - BBVA,<br />

Alibaba, Tencent, WeChat, DBS, CommBank, Hana<br />

Bank on the banking, tech or corporate side, and<br />

Transferwise, Everledger, Lufax, Lending Club, Stripe<br />

on the start-up side - will make the best impact. Too<br />

many are simply 'nibbling around the edges' and need<br />

to jump in the deep end!<br />

ROB FINDLAY<br />

16 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


. Make every customer experience feel personal<br />

To stand out from the clutter, banks need to build emotional engagement with their<br />

customers. By making sense of customer data available to them, they can provide<br />

customers with personalized, relevant, and contextual solutions to fit their current lifestyle<br />

needs. Banks also need to take a holistic view of how their multiple products and services<br />

can work together instead of existing in silos, creating a seamless experience for<br />

<strong>Millennial</strong>s who may have multiple accounts, relationship managers and lifestyle needs.<br />

<strong>The</strong>se efforts would make every customer believe his digital journey is a carefully curated<br />

experience.<br />

c. Look out for Partnerships<br />

With the focus less on banks and more on banking,<br />

banks should find the right partners and the right<br />

engagement models, be it investments, client-vendor,<br />

a JV or any other such relationships, to remain<br />

relevant. <strong>The</strong>y can collaborate with FinTech<br />

companies to deliver a better user experience, which<br />

we are already seeing with some banks. BBVA<br />

launched a robo-advisor product in the market with<br />

FutureAdvisor and DBS Bank recently launched a<br />

mobile-only bank in India and used tech from Kasisto<br />

(AI) for the virtual assistance.<br />

AMIT GOEL<br />

Banks can tap insights from their customer data to identify other brands making an impact<br />

in the same space that they want to be in to. This should serve as a basis for potential<br />

partnerships in offering new solutions. With this foundation, banks can create services that<br />

enhance, rather than compete with, the services that customers use and love. By<br />

associating a bank’s brand with these beloved companies, and by providing novel value,<br />

banks tap external brand associations that reposition themselves as a lifestyle-enabler.<br />

Partnerships are key and associating with brands<br />

<strong>Millennial</strong>s already know and love will provide them<br />

with the best of both worlds - trust and solid<br />

foundation. Now, more than ever, collaboration is key.<br />

SCARLETT SIEBER<br />

17 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


7. Team Behind the Report<br />

PARVEZ AHMAD<br />

Director of Marketing, Asia Pacific & Japan<br />

Oracle Financial Services<br />

Parvez focuses on marketing strategy, demand generation and thought leadership. He has led global<br />

marketing campaigns on Digital Banking and FinTech initiatives, including the impact of Digital on<br />

Retail Banking, and the impact of <strong>Millennial</strong>s on the digital banking customer journey. Parvez is also<br />

closely involved in the FinTech Startup space in Asia Pacific, being a mentor at Startupbootcamp<br />

FinTech, and the creator of innovative online & offline platforms such as #DigitalBootcamp and<br />

#DataAnalyticsBootcamp.<br />

@parvezah<br />

https://www.linkedin.com/in/parvezah<br />

MONICA MYERS<br />

Monica is a second year MBA student majoring in Marketing and Management. She recently won the<br />

2015 Penn Design Challenge, which partnered with American Express and innovation accelerator<br />

Made by Many to rethink how “underbanked” consumers can better interact with their finances and<br />

manage their spending. Prior to Wharton, she was a Finance Manager at American Express, and<br />

recently interned at Google doing business development for its mobile wallet, Android Pay.<br />

@MonicaM_NYC<br />

https://www.linkedin.com/in/monicamyers<br />

IRFANALI MANJI<br />

Irfan is a first year MBA student majoring in Marketing and Operations. Prior to Wharton, he worked at<br />

Capital One launching affluent card products and collaborating with Uber and Intel to build exclusive<br />

digital experiences for customers.<br />

DIVYA KRISHNAN<br />

Divya is currently pursuing an MBA majoring in Finance and Marketing. During her time at Wharton,<br />

she has researched and consulted for a leading online lending company, a startup quantitative risk<br />

manager, and a digital currency asset manager. Prior to Wharton, she spent five years at Citigroup as<br />

an analyst within quantitative trading and a senior associate in structured products.<br />

@irfanalimanji<br />

https://www.linkedin.com/in/irfanmanji<br />

@divya08k<br />

https://www.linkedin.com/in/divkrishnan<br />

Acknowledgements<br />

ELIZABETH STARK<br />

At Wharton, Liz is involved with the FinTech club, led the Penn Design Challenge with Wharton<br />

Innovation & Design, and is a consultant for the Small Business Development Center. Prior to Wharton,<br />

she was a Manager in the Corporate Strategy Group at Capital One, leading analyst teams and lead<br />

projects relating to product development, customer analysis and experience, and new market entry.<br />

https://www.linkedin.com/in/lizstark<br />

(1)<br />

“Why Small Business Saturday Is Massive <strong>Millennial</strong> Business”; Nov 25, 2015; at<br />

http://www.forbes.com/sites/winniesun/2015/11/25/small-business-saturday-is-big-millennial-business/#4e1<br />

eca197669<br />

(2)<br />

“How <strong>Millennial</strong>s Are Changing <strong>The</strong> Face Of Marketing Forever”, Jan 15, 2014; at<br />

https://www.bcgperspectives.com/content/articles/marketing_center_consumer_customer_insight_how_mill<br />

ennials_changing_marketing_forever/<br />

(3)<br />

https://www.salesforce.com/blog/2016/03/stats-about-millennials-mobile-banking.html<br />

(4)<br />

http://www.cnbc.com/2015/04/22/for-millennials-banking-is-all-about-the-apps.html<br />

(5)<br />

https://www.mint.com/<br />

18 <strong>The</strong> <strong>Millennial</strong> <strong>Migration</strong>: How Banks Can Remain Relevant In <strong>The</strong>ir Decision-Making Eco-System


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