There is much debate around whether or not Millennials, currently ages 22 to 39, will inherit trillions (yes, trillions) from their parents and grandparents. The debate often centers on whether Millennials’ parents and grandparents will outlive their retirement savings and/or be able to provide a transfer of wealth through life insurance or assets, such as real estate. Many experts predict that the intergenerational wealth transfer will be in the trillions of dollars.
Tom Naratil, President of UBS Americas, and Jürg Zeltner, President of UBS Wealth Management say we are on the brink of one of the “largest intergenerational wealth transfers in history.”
Overlooked in this eye-popping conversation about trillions of dollars is that this transfer of wealth—whether actually trillions of dollars or hundreds of billions of dollars—will add tremendous fuel to Millennials ever-growing impact on the banking sector.
With a significant amount of money passing into Millennial hands, banks must be poised to accept and unlock the potential of serving this new clientele. Tailoring banking practices towards a Millennial focus will become essential in order for banks, as well as credit unions and fintech, to survive and thrive as potentially trillions of dollars shift to Millennials. Below are the three interesting factors a bank should consider—and all consumers should know about—as banks look to adapt to the new and emerging generational preferences of Millennials:
- Convenience is Everything
The Millennial generation is the generation of on-demand everything. No matter what they need, there’s an app for that. The development of technology and the smartphone has created a generation that expects to be able to get whatever they need, when they need it. Whether it’s hailing a ride, reading the news, or video chatting with a friend half-way across the world, the Millennial generation wants to be able to do it now and in the click of a button (or tap on a smartphone screen!). To attract and retain Millennial customers bank leaders must develop a strong online presence and a mobile app or mobile-first experience to give Millennials the convenience they demand.
- Multi-Channel Delivery
Yes, Millennials want to be able to access everything through their phones. However, that doesn’t mean traditional banks should close shop. In fact, UBS found that Millennials are nearly two times more likely to visit a branch in person, and are three times as likely to converse with a broker in person. Banks must still emphasize building relationships with their customers in person, but make it easy for customers to chose how they want to have that relationship for different types of interactions.
- Transparency is Expected
Growing up in an online-first economy dramatically raised Millennial expectations about corporate and banking transparency of information, fees, corporate responsibility, and inclusion. Millennials attitudes towards data sharing and transparency come with the increased expectation that the transparency not only reveals the truth about the organization but also that they will receive more customized, tailored, and better services because they are personally providing more information.
As we look toward a future where Millennials will seemingly benefit from an almost unprecedented transfer of wealth, banks, credit unions, fintech and other financial institutions will be challenged yet required focus their efforts and adapt services to meet the preferences and priorities of the Millennial generation as they will become the core generation for stability, growth, referrals, and influencing the next generation of banking customers. .
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