Hero image credit – Anggit Yuniar Pradito
Who are millennials?
Millennials, once a mysterious generation of selfie-loving, smartphone obsessed individuals, are now one of the largest generations. According to PwC they will soon make up 50% of the global workforce.
Millennials are often described as selfish, having grown up in an individualistic culture. However, studies have shown they have very similar goals to previous generations when it comes to starting a family and getting married, but they are choosing to do this later in life. Why? Dr. Twenge suggests it’s because they have big ambitions to achieve before settling down. Meanwhile, they are more tolerant and less prejudiced than previous generations. Sounds like a pretty great bunch to me! (Disclaimer: yes, I am also a millennial).
Why are they important?
Millennials are the customers of the future. Over the next 10 years they will be making purchasing decisions, forming brand loyalties and influencing their peers. They are a big, powerful generation with high standards and unique characteristics that have a huge influence on future market trends.
What we learnt:
Here at Tobias & Tobias we are experts in the FinTech realm and have created a multitude of solutions for companies with a spectrum of users. Through our work we have discovered 6 things that can’t be ignored when designing for millennials.
1. Millennials have high expectations
Credit – Fefi
Millennials want speed, ease and efficiency along with instant gratification. Do whatever you can to reduce the friction between them discovering your brand and consuming your product. Provide them with a straightforward focus on delivering a specialised product that’s purpose built for them.
Optimising your product for speed is vital, along with ensuring accessibility across all devices. As a result, many FinTechs choose to design with a mobile first approach.
2. Millennials like to share
Credit – Aslan A. for Fireart Studio
Millennials are increasingly using the ‘sharing economy’. Due to the financial constraints they face, they are reluctant to buy items that were once considered essential such as a car or house. A new wave of services caters to users wanting access without the burden of ownership, such as Airbnb, ZipCar and Uber.
Traditional financial services use business models based on cross selling. Often those services are sub-optimal, but the consumers don’t know that. Only when a new alternative becomes available does the consumer realise they have been paying for a mediocre product. For example, when there was an increase of passive management and Exchange-Traded Funds the consumers realised they were overpaying for underperforming mutual funds.
Peer-to-peer lending is a great example of FinTech and the sharing economy merging to leverage under-utilised capital for investment purposes (without the bank taking a huge cut!).
3. Millennials are independent
Credit – Glenn Thomas
A study by Aspect found that 73% of millennial consumers wanted the ability to solve product and service issues on their own. Allowing users to take control not only gives them a positive impression of the service but it inevitably saves money on customer service costs.
Riskalyze is a FinTech start-up allowing advisors to create portfolios with just the right amount of risk. It is built on the foundation that to accomplish long- term financial goals, it takes one great short-term decision at a time.
Riskalyze recognised that average investors tend to sabotage their investment decisions. They set out to turn this around by creating a short-term framework that allows the average investor to understand and react to risk more appropriately and make valuable short-term decisions.
4. Millennials value transparency
Credit – Sam Michael for Monzo
Millennials insist on transparency: they rely more on friends and families’ recommendations than traditional advertising, causing some companies to struggle to engage with them.
A key reason FinTechs have become popular among millennials is their ability to provide users with a clear overview of their financial activities.
Monzo, an online only bank, provides real time account updates and automatically categorises spending to learn your behaviour and suggest suitable budgets. This is different to traditional banks that often take days for money spent to leave your online bank account, giving an inaccurate overview of your finances.
5. Millennials want something personal
Credit –Glen Kusnetsov
Millennials love brands that have a positive social impact. They also want to feel special. FinTech companies achieve this through their offering of investment and savings advice, advanced analytics on digital transactions and personalised offers.
As Artificial Intelligence becomes more prevalent, the FinTech space has started to take advantage of its capabilities. There is a belief that millennials have poor money management compared to previous generations. Companies, such as Finch and Chip, attempt to counteract this by using AI to help users identify negative spending patterns and opportunities for saving.
6. Millennials want value
Credit – Makers Company
The basic needs of consumers in the financial space have for the most part stayed the same. As a result, the core functionality of the majority of finance applications haven’t changed. The key innovations that have occurred have been streamlining existing processes. New features are typically additions rather than true innovations.
FinTech companies allow for new products and services to be available to consumer groups who may not have previously been able to access traditional financial services. For example, TransferWise provides a simple product at a lower cost. FinTechs also have a focus on enriching customer experience through simple and engaging interactions. A project we completed with RightIndem, an online motor claims platform, enhanced the customer experience causing a 60% increase in renewals during pilots.
Millennials are expected to increase their wealth considerably as they enter their prime-earning years, resulting in a significant rise in liquid assets. According to Deloitte, the combined net worth of millennials is estimated to grow to between £13-17 trillion. However, they tend to be more conservative with their finances than previous generations, perhaps due to previous financial crises. Plus, they are increasingly more likely to consult peers and media before acting on expert recommendations.
Millennials consider mobile technology a key aspect when using financial services. In the future, millennials will no longer be a simple buzzword created for marketing purposes but a main contributor to your revenue. There is a great opportunity for FinTech companies to grow market share through paying close attention and addressing the needs of millennials, so think twice before overlooking them.