The Millennial Migration
The-Millennial-Migration-report
The-Millennial-Migration-report
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<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
About Oracle<br />
Oracle offers a comprehensive and fully integrated stack of cloud<br />
applications and platform services. For more information about Oracle<br />
(NYSE:ORCL), visit www.oracle.com.<br />
For additional information on Oracle and its banking solutions, visit Oracle<br />
Financial Services at<br />
www.oracle.com/us/industries/financial-services/index.html<br />
About Wharton FinTech<br />
Wharton FinTech is the first student led FinTech initiative. We are FinTech<br />
thought leaders connecting innovators, academics and investors with the<br />
ideas and companies that are reinventing global financial services.<br />
For additional information on Wharton FinTech and its thought leadership,<br />
including access to original content published on its blog and podcast, visit<br />
https://medium.com/wharton-fintech<br />
Join the conversation @Digitize2Thrive<br />
Join the conversation @WhartonFinTech<br />
Oracle Corporation<br />
World Headquarters<br />
500 Oracle Parkway<br />
Redwood Shores, CA 94065<br />
U.S.A.<br />
oracle.com<br />
Copyright © 2015, Oracle and/or its affiliates. All rights reserved. This document is provided for<br />
information purposes only, and the contents hereof are subject to change without notice. This<br />
document is not warranted to be error-free, nor subject to any other warranties or conditions,<br />
whether expressed orally or implied in law, including implied warranties and conditions of<br />
merchantability or fitness for a particular purpose. We specifically disclaim any liability with<br />
respect to this document, and no contractual obligations are formed either directly or indirectly<br />
by this document. This document may not be reproduced or transmitted in any form or by any<br />
means, electronic or mechanical, for any purpose, without our prior written permission.<br />
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be<br />
trademarks of their respective owners.