Millennials aren't children anymore. They are 18- to 33-year-olds who are active in the workplace, are carrying debt, and have a completely different view on financial institutions than the generations before them. Oh, and they will be inheriting $30 trillion over the next couple of decades.

Credit unions that have added new technology and revamped their customer service approach to serve this generation are light years ahead of those thinking traditional approaches will work just fine.

Millennials have watched the dot-com bubble burst, the crash of the housing market, the Great Recession, and the blaming for most of these financial calamities on reckless financial institutions and predatory lenders.

This is a generation that has a default setting of distrust. Where once people trusted until they were given a reason to distrust, this generation is looking for a reason to trust. Institutions are not given trust; they must earn it.

Only 19% of Millennials say most people can be trusted as compared to boomers (those born between 1946 and 1964), where 40% of those surveyed say most people can be trusted.

Along with the distrust and wariness, they are more risk averse in their dealings with investments and handling their finances. They are more comfortable with alternative financial options (payday lenders) than other generations. In fact, this cautious nature doesn't just apply to financial institutions; it applies to how they approach many traditional institutions.

According to a 2013 Pew Research study, the number of individuals married between the ages of 18 and 32 is 26%, significantly lower than when other generations were in this age group (for Gen X, 36%, and for boomers, 48%). Also marriage is becoming more common among the affluent, which may indicate a social-economic influence on the structure of a family. In 2012, 47% of births to women of the Millennial generation were non-marital.

Religion is also an institution on the wane for this generation, with only 58% saying they are certain God exists and 36% describing themselves as a religious person.

With a different orientation of trust, family structure, religion and view of financial institutions, is it any wonder they have to be reached in vastly different ways than how members are traditionally reached?

Next Page: Yet, Still Optimistic

Milliennials are optimistic about their personal finances. The majority of those surveyed say that have enough money to lead the lives they want and believe the best years are ahead. However, the Pew study indicates that Millennials are the first generation in modern history to have higher levels of student debt, poverty and unemployment and lower levels of employment and wealth than their preceding generations.

Their drive for material wealth has been replaced with a greater focus on affordable quality of life needs, with the one exception being technology. Smartphones, tablets and other personal use technology are worth sacrificing for in the minds of Millennials.

Home ownership continues to be a priority for this generation. In fact, according to the National Association of Realtors, Millennials now comprise the largest share of home buyers. Even though tight credit and high debt loads are limiting their ability to purchase a home, their desire for the long-term investment of owning a home is significant.

Building trust and collaboration will draw the Millennial generation through your doors. Millennials are looking for financial institutions to be more of a partner than an approval process, to teach them about financial management and to work with them in difficult times. The payday lenders will provide them with the $1,000 loan to get repairs done on their old vehicle – will your credit union? If so, how are you letting them know you are their partner, especially in the tough economic times?

Older generations typically were married before attempting a joint income first home purchase. Today, Millennials are having to pool resources among unmarried partners or a collection of roommates. How well does your mortgage approval process work with these type of borrowing parameters?

Finally, Millennials are vastly comfortable with texting as a significant means of communication. Face-to-face conversations can be uncomfortable, especially when doing something unusual or unfamiliar, like taking out a mortgage. This more formal transaction style can trigger all sorts of distrust issues for them, unless they have been prepared for such a conversation.

Because this generation is different and less structured in their interactions, traditional financial institutions have turned away from grasping this generation, which is almost as large in number as the Boomers. The Millennial Marketplace is wide open for those credit unions ready to communicate the message of membership in a trusting, approachable partnership through technology and one on one coaching. Are you ready to reach the Millennial Marketplace?

Russell J. White is president of Banking Agility in Charlotte, N.C.

Instant Insights /

Reaching the Millennial Marketplace

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