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HOW MILLENNIALS ARE SHAKING UP THE WAY WE SAVE AND SPEND IN THE UK

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UNLOCKING THE OPPORTUNITY WITH MILLENNIALSThe Millennial generation, those born between 1980 and 1999, have strikingly different expectations from financial service providers compared to previous generations.

By 2025, Millennials are expected to make up 75% of the British workforce1. They are cautious with their money, glued to their smartphones, and have little loyalty to the high street banks. They are most comfortable banking online or on their smartphones because when it comes to making transactions, they value immediacy, flexibility and speed.

They are confident experimenting with new technology, including m-payments, and with challenger brands from beyond the banking world. These push factors are opening up a new market for established financial service providers and brands willing to navigate new technological waters.

In this report, MWW PR provides insights into the way Millennials are saving and spending along with identifing tactics to help brands in the financial services industry engage with Millennials who are the customers of the future.


Unlike Generation X who preceded them, Millennials are financially conservative and feel the need to take control of their financial future from an early age.

They not only have a strong desire to save their money, but also have an aversion to taking on unsecured debt, even though student loans and the rising cost of housing means many will have to manage unprecedented levels of borrowing2.

However, only a third of Millennials think that their bank can help them with the unique challenges their generation face3, and nearly half find financial information difficult to comprehend4.

NEARLY HALF (49%) OF MILLENNIALS CONSIDER THEMSELVES “SAVERS”, COMPARED TO 25% WHO CONSIDER THEMSELVES “SPENDERS” 2

NEARLY TWO-THIRDS (63%) OF MILLENNIALS AGREE THAT IT IS IMPORTANT TO SPEND TIME RESEARCHING THE BEST WAYS TO SAVE AND INVEST MONEY 4 ONLY 32% OF MILLENNIALS AGREE THAT THEIR BANK HAS PRODUCTS THAT HELPS THEM “DEAL WITH THE FINANCIAL CHALLENGES FACED BY THEIR GENERATION” 3

48% OF MILLENNIALS FIND INFORMATION ON FINANCES AND INVESTING DIFFICULT TO UNDERSTAND 4

THE MILLENNIAL MONEY MINDSET

MARKETING/PR OPPORTUNITY #1 With Millennials more willing to research and spend time to understand the financial services that they need, it is imperative for brands to provide clear and concise information online. A clear and straightforward content strategy can help Millennial consumers engage with and understand products at an uncomplicated level that is relevant to them.



MOBIVORES GALORE

MILLENNIALS ARE ESTIMATED TO CHECK THEIR SMARTPHONES 43 TIMES A DAY, HENCE THEIR “MOBIVORE” TAG5

66% OF MILLENNIALS USE MOBILE BANKING WEEKLY, WHILE 40% SEE MOBILE BANKING AS A MUST-HAVE6

46.9% OF ALL ONLINE PAYMENTS AND 40% OF PAYPAL TRANSACTIONS ARE MOBILE7

52% OF MILLENNIALS WOULD LIKE TO MANAGE THEIR FINANCES ON A SMARTWATCH8

The Millennials’ attachment to their smartphones and their high expectation of immediate and fast banking transactions – “action at the point of thought” - is fuelling the rise of mobile banking, with average weekly banking transactions via mobile phone apps doubling between 2012 - 2013 to 18.6 million9.

Nearly three-quarters of consumers say they will make an in-store mobile payment within the next two years10. Similarly, there is strong growth in mobile and contactless card payments, and a drop-off in the use of cash, which counted for less than half of consumer and business payments in 201411.


MARKETING/PR OPPORTUNITY #2 The advent of increasing mobile usage offers the opportunity for real-time awareness of a person’s location which then allows brands to deliver content that is timely and relevant. Mobile needs to be a central part of your service to communicate with millenials. For example, with in-store mobile payments, brands could geo-target those Millennials who are making payments with tailored incentives via the brand’s social media channels.

Most adult smartphone owners are interested in using a mobile wallet - a secure app that holds all your cards. The advent of wearable devices, such as smart watches, has made Millennials more interested in digital banking, with almost half of them having banked on a wearable device since the launch of the Apple Watch12.

However, it is important to note that there are still significant barriers to the widespread adoption of in-store mobile payments, including concerns around data security, a lack of understanding of its benefits, and not having the necessary phone app13.



BRAND EXPERIMENTERS When it comes to banking, Millennials have no qualms trying out challenger brands to the high street banks, with nearly half saying they would consider using services from Google or Apple14.

49% OF MILLENNIALS WOULD CONSIDER USING FINANCIAL SERVICES FROM COMPANIES LIKE GOOGLE OR APPLE, COMPARED TO 16% OF OLDER CONSUMERS 15 62% OF CONSUMERS TRUST THEIR BANK THE MOST TO SAFEGUARD THEIR PERSONAL AND FINANCIAL INFORMATION, FOLLOWED BY THEIR CARD PROVIDER (E.G. VISA, MASTERCARD) WITH 18%, AND THEN MOBILE DEVICE MANUFACTURERS, SUCH AS APPLE, WITH 11% 16

MARKETING OPPORTUNITY #3 There is a clear interest from Millennials to use new technology as a means to spend and to save. Whether it be a mobile banking app or a wearable device, benefits such as convenience and saving time are likely to be factors for adoption. However, there is nothing better than experiencing new technology so customers can see first-hand how it works. Demonstrations therefore are key for financial services brands to educate their key stakeholders.


New, digitally focused banks that cater to the Millennial mindset are expected to change the traditional UK banking marketplace. Atom, for example, will offer mobile-only banking with customisable design tailored to the consumer17 while Mondo offers a service to track and manage finances, with plans for fully-regulated bank accounts by the end of the year18. Mobile payments company iZettle and peer-to-peer money transfer service Transferwise are further disrupting the status quo by offering the best technology and social media features19.

Despite showing a willingness to experiment with mobile apps for payments, consumers have concerns around security and safety and trust their bank far more than other financial service providers to safeguard their personal information. Some banks are using their high trust position to launch new m-payment apps, while mobile payment services like Zapp and PingIt have partnered with major UK high street banks to capitalise on their trusted status20.

MARKETING OPPORTUNITY #4 Despite some improvements in customer trust in the financial services industry, there is still a need for better transparency given recent scandals, and this is something all financial service brands should work towards. It can help bring back trust amongst your customers.

Listening to and engaging with customers on social media in an authentic way can help your brand understand what people want to talk about and why they might want to engage with you. Of course, there are plenty of consumer issues which may arise through this tactic, but these should all be seen as opportunities by the brand to address them in an open forum where deep engagements and meaningful conversations between consumers and the brand can be had.



The UK financial services market, fuelled by the needs and demands of the Millennial generation, is experimenting with new ways of delivering its services and products to consumers who want transactions to be fast, immediate and secure. They are happy to try out the latest technology, such as wearables, and challenger brands from beyond banking.

There is a real threat to established providers and opportunities for new ones. A decline in trust combined with a rapid and significant behavioral change is driving reassessment of financial services provision. How brands respond to that will define their future.

For marketers within the financial services industry, the most important action is to show that you truly understand Millennials. We must not forget that, whether a customer is spending or saving, it is a means to an end. Therefore, the Millennials’ motivation, emotional and rational feelings and their reason for what they do and the true role the brand can play in this journey should be considered.

MWW understands how brands can rise to meet customer expectations within the financial services industry. For more, or to discover how our recommendations will boldly take you exactly where your marketing/PR wants to go, contact us.opportunities for personalisation an

CONCLUSION


1. The Drum http://www.thedrum.com/news/2014/11/11/millennials-will-account-75-workforce-2025-many-employers-still-stuck-analogue-mode. 2. (1/21/16) [Millennials’ money habits ‘influenced by parents’] Retrieved from http://money.aol.co.uk/2016/01/21/millennials-money-habits-influenced-by-parents/ 3. (7/29/15) [One in four millennials still use childhood bank account] Retrieved from https://www.uswitch.com/media-centre/2015/07/one-in-four-millennials-still-use-childhood-bank-account/ 4. (5/15) [Millennial and Financial Services] Chicago, IL. Mintel. 5. (10/28/15) [The Rise of Digital Challenger Banks. Are they just for Millennial Mobivores] Retrieved from: http://digitalmarketingmagazine.co.uk/articles/the-rise-of-digital-challenger-banks-are-they-just-for-millennial-mobivores/2780. 6. Rapetti, V. (11/5/2015) [Banking Disruption: Fintech And The Rise Of Challenger Banks] Retrieved from http://newentrepreneursfoundation.com/banking-disruption-fintech-and-the-rise-of-challenger-banks-by-veronique-rapetti/. 7. Rossi, B. (2/12/2016) [Three quarters of Brits admit mobile has impacted their behaviour, memory and health] Retrieved from http://www.information-age.com/technology/mobile-and-networking/123460934/three-quarters-brits-admit-mobile-has-impacted-their-behaviour-memory-and-health. 8. (10/21/15) [Millennials embrace wearable banking – poll] Retrieved from https://www.finextra.com/news/fullstory.aspx?newsitemid=28009. 9. (4/28/15) [Mobile Banking Transactions in the UK Grew Nearly 105% in 2013] Retrieved from http://www.emarketer.com/Article/Mobile-Banking-Transactions-UK-Grew-Nearly-105-2013/1010792. 10. (2015) [2015 U.K. Consumer Mobile Payment Study] Columbus, GA. TSYS 11. Ratcliff, C. (7/7/2015) [Cash is still the most popular way to pay, for now] Retrieved from https://econsultancy.com/blog/66666-cash-is-still-the-most-popular-way-to-pay-for-now/. 12. (10/21/15) [Millennials embrace wearable banking – poll] Retrieved from https://www.finextra.com/news/fullstory.aspx?newsitemid=28009. 13. Rossi, B. (2/12/2016) [Three quarters of Brits admit mobile has impacted their behaviour, memory and health] Retrieved from http://www.information-age.com/technology/mobile-and-networking/123460934/three-quarters-brits-admit-mobile-has-impacted-their-behaviour-memory-and-health. 14. (6/15) [2015 Makovsky Wall Street Reputation Study] New York, NY. Makovsky. 15. (6/15) [2015 Makovsky Wall Street Reputation Study] New York, NY. Makovsky. 16. Fleming and Yu. [Consumers Doubt Their Personal Info is Very Safe] Retrieved from http://www.gallup.com/businessjournal/181904/consumers-doubt-personal-info-safe.aspx. 17. Williams-Grut, O. (6/24/2015) [Britain just gave the green light to a bank with no branches and no website — just an app] Retrieved from http://www.businessinsider.com/atom-bank-gets-banking-licence-from-bank-of-england-to-launch-app-2015-6?r=UK&IR=T. 18. Bryant, M. (2/16) [Mondo gives you a smarter debit card – and could one day replace your bank. Retrieved from http://thenextweb. com/apps/2016/02/15/mondo-gives-you-a-smarter-debit-card-and-could-one-day-replace-your-bank/#gref. 19. Sawers, P. (2/25/16) [The bank that fintech built: Number26 and TransferWise team up to re-invent banking] Retrieved from http://venturebeat.com/2016/02/25/the-bank-that-fintech-built-number26-and-transferwise-team-up-to-re-invent-banking/ 20. (2015) [2015 U.K. Consumer Mobile Payment Study] Columbus, GA. TSYS.

KED MATHER SENIOR ACCOUNT DIRECTOR +44 207 046 6080 | [email protected]

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HOW MILLENNIALS ARE SHAKING UP THE WAY WE SAVE AND …returnonreputation.com/wp-content/uploads/2016/09/HOW... · 2016-10-31 · HOW MILLENNIALS ARE SHAKING UP THE WAY WE SAVE AND