Bringing Millennials into Banking

By Rob Morgan

Millennials are not disenchanted with banks, they just are not ready for the products that brought previous generations into the banking system.

Millennials have had a rough financial start. More millennials are going to college than any previous generation. Although this is good, many are taking on debt to do so. In fact, 75 percent of graduates today have student loan debt, averaging $29,000.

At the same as they are taking on this debt, their earnings prospects are diminished. Millennials have entered the workforce in a period that has seen two historic recessions. With higher debt and lower earnings, it is no surprise millennials’ finances are a bit shaky.

Because of their finances, millennials are delaying major life events. Just 23 percent of adults aged 18-31 are married and own a home. Major life decisions like starting a family and buying a home are exactly what brought previous generations into banks.

Despite this slow start, millennials want the same things as previous generations, just on a slower timeline. Studies show that 93 percent of millennial renters plan to own a home someday and 74 percent want to have children.

In order to accomplish this, millennials need first to rebuild their finances. This is exactly where they need banks’ help.

Banks can leverage technology to deliver innovative products that help rebuild millennials’ finances. If they are able to do this, when millennials are ready for mortgages they will turn to the banks that helped them get there.

Rob Morgan is VP for emerging technologies at ABA.