*This post originally appeared on MyBankTracker as a guest post from Banking.com.
At this point it’s almost a cliché to talk about millennials. We know who they are: the generation born between the late ‘70s and late ‘90s, or essentially book-ended by the Vietnam War and 9/11. They’re frequently derided, but can’t be ignored — there are now close to 100 million of them, which means they constitute the bulk of the consumer class. More importantly, they define both the business and lifestyle practices of the modern era. They’re not them anymore — they’re us.
So what does this mean for the business world in general, and the financial services community in particular?
That question periodically generates hot debate, and we seem to be in one of those cycles now. Every shift and each innovation is viewed through this prism, and with good reason. Trends will rise and fall based on its success with this market.
To be clear, every successive generation has its defining characteristics. The Greatest Generation we associate with World War II was clearly unique. The Baby Boomers that followed them set trends that we follow today. Gen-Xers helped lead us into the digital revolution. So what is it about Gen-Y (sounds so much better than “millennials”) that will define our era for those that come after?
An exhaustive study of this demographic (conducted jointly by Service Management Group, Boston Consulting Group and Barkley) identified the key words associated with this group: technology-reliant, image-driven, multi-tasking, open to change, confident, team-oriented, information-rich, impatient and adaptable.
A few of those terms surely have great resonance. “Technology-reliant?” Absolutely. The Internet became mainstream just as this generation reached college age, which means they were its earliest adherents. No wonder, then, that they’re also “information-rich,” not to mention “impatient” and “adaptable.”
The fact that they’re team-oriented is equally significant. A new article in Investors.com analyzes the distinctive habits of financial advisers from this generation and finds that the key to performance is collaboration—in keeping with their upbringing, they thrive on constant feedback. Of course, they also differ from their predecessors in many ways. Rather than put in extra-long workweeks as their parents did, they want flexibility in everything from days off to working from home.
Perhaps most importantly, they have a greater sense of security about their savings. This is despite the fact they potentially have a pessimistic outlook, representing a sea-change in attitude from, for example, the election in 2008.
One unmistakable characteristic in the Gen-Y crowd, of course, is the adoption of new technologies. This also has a domino effect, and banks need to stay aware of this phenomenon. For example, remote deposit capture has spread with remarkable speed, which in turn has diminished the value of branch banking — it was often the only reason younger consumers ever entered a bank. Other mobile innovations have had a similar effect, which is why digital accounts now arouse greater interest than ever before. In addition, an entire generation nursed through technological adolescence by the soothing tones of Siri might want someone like “her” guiding them through complex financial transactions.
In a larger sense, if Gen-Y is a significant part of the market now, it essentially is the market (soon). They have enormous clout already, with massive buying power out-sizing influence. They are clearly more fickle, apt to change service providers on a whim, less impressed by brand credibility, and have a more international outlook than earlier generations.
Above all, the fundamental change with Gen-Y, actually, is just that — change. This may be the first generation that can be fairly assured the career they begin with is not the one they’ll end up in. Every aspect of their lives will undergo systemic transformation, often through no fault or desire of their own, and they will need support systems, including banks and accountants, to be similarly adaptable. Financial services providers that can stay ahead of such trends will win their hearts and their business, but be warned, just keeping up will be a challenge.