Banking with Millennials

Victor Notaro
5 min readMar 25, 2016


If you go by some of the headlines you see in Financial and Banking sections of the internet and newspapers, millennials are the worst thing to happen to banking since Jesse James. With headlines like this American Banker story entitled: “What Do Millennials Want from Banks? Everything. Nothing. Whatever.” And this Fast Company article entitled “Sorry, Banks. Millennials Hate You.” it is pretty clear that either the banking industry feels threatened by millennials, or the journalistic world wants the banking industry to feel threatened, or both. Some professionals are even going so far in this fear as to say that millennials are poor, live at home, have no assets, and should not be courted by banks anyway.

The point that most financial institutions is missing is the “why” of how millennials are viewing finances and banks differently than previous generations. The financial crisis that started in 2007 impacted most of the generation right in the middle of the pivotal years spent graduating from high school and college. These people were having trouble finding jobs, paying off student loans, and a lot of young adults saw their parents go through equally hard (or even more difficult) times. This led to them staying at home much longer, and being more distrustful of large institutions. And it’s not just banks, either. According to Forbes: “Millennials are skeptical of traditional institutions. According to a recent research paper from BBVA, almost half of all Millennials say they are politically independent, and a third report no religious affiliation at all. These are the highest rates of political and religious disassociation in the last twenty-five years.’

Additionally, millennials have the most education of any generation to date. This leads to crippling debt before they even begin their professional career. The push to pay off student loans (with an average debt of $20,000) before taking on any more debt or loan weight is the reason that millennials aren’t getting as many home or auto loans, or seeking out credit cards. Combine that decision making process with the fact that many millennials saw with their own eyes during the financial crisis the trouble that debt could get a person or family into, which makes it far more intimidating to apply for a credit card without education on how to maximize the use of it. All they have seen are the downsides.

These facts are leading to millennials having the lowest average credit scores of any generation. 3 out of 4 millennials surveyed said that they do plan on buying a home at some point, if they can. And because of the mistrust of large institutions and financial stability, they do not expect to see Social Security benefits, and are therefore — while they are not saving as large a percentage of their salary as baby boomers- they are currently outpacing everyone in retirement savings.

Studies have shown that they have less money to spend than previous generations have had at the same point in their lives, according to figures collected from the Census. They are also less sure of how to spend it. There has been a lot of talk about millennials needing coaching and feedback too often, that they are needy. But in an age where every extracurricular activity has a coach or a tutor, more and more people have reached a higher level of education than ever before, and even video games have a tutorial before you begin playing in earnest, many millennials are used to being coached through something first before feeling comfortable with it.

High school and college curriculums are not strong in the areas of teaching financial planning and responsibility. This is one of the best ways for a bank to get ahead in the world of millennials. Develop a financial course or counseling program. Hire a social outreach manager. The best way to develop a rapport with this generation is to show them what they should be doing, how much they should be saving, what loans they should take, and which interest rates are most desireable without condescension and with ease of use. This can be everything from a guidance app to active social media managers, to an in-branch bank role dedicated to this sort of thing, to community outreach meetups and workshops. The field here is pretty wide open, but one key is to let them come to you. While millennials prefer being coached, they also prefer doing as many mundane tasks as possible without talking to another person, so being aggressive with a new money coaching initiative may come across as grating to a young professional if they did not seek it out.

Familiarity with technology, of course, also plays a large role. The average millennial has had a smartphone since seventh grade. The ease of user experience and onboarding with a financial institution is key to customer loyalty with the millennial set. That, and keeping up with technological changes. Half of surveyed young adults want their bank to use SMS/text messaging, as an example.

Scratch, a subsidiary of Viacom, which surveyed 10,000 people born between 1981 and 2000 for what they call the “Millennial Disruption Index”, reported that banks are not only among the most unlikable brands with this demographic, but one-third of those surveyed believed they would not need a bank at all in the future, that they would become obsolete.

They also believe that the way they access money will be totally different, and the way they pay for things will change completely within just that small five year window. In order to keep the millennials as business customers it is up to the banks to figure out where that potential technology of payment changes and money storage is going to go, and implement it into the current banking systems as they develop.

This TechCrunch article is a really good example of some of the applications being developed to apply for loans, initiate money transfers, invest in the market, save money, put money away for retirement, and other transactions that can supplant the need for banks on an individual level if the banks do not try to compete.

Once Gen X begins to retire, millennials will dominate the financial markets for the following two decades at least, if not longer. It is time to understand what the financial institutions can do to court this generation of young professionals instead of writing them off as not worth the time.

Originally published at on March 25, 2016.



Victor Notaro

Victor Notaro is a corporate and commercial #banking professional. He has over 20 years of #financial services experience. #Pittsburgh