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Monetizing Millenials: Insight, Investment, Vision and Patience


Millennials are a hot topic in financial services. That’s because they constitute 27 percent of the U.S. population, and, at ages 18-34, they’re just starting their financial lives. Like it or not, a good chunk of retail financial services’ revenue depends on capturing the hearts and wallets of this enigmatic demographic segment and providing value that inspires loyalty and creates customers for life.

Easier said than done, of course, because millennials are hardly homogeneous. The high school kid waiting tables for tips could be a millennial. The fresh-faced intern in your office likely is, and the ER doc who just set your child’s broken arm might be. And, then there’s the millennial poster child—Facebook founder Mark Zuckerberg, with a net worth of nearly $50 billion. Even leaving Zuckerberg aside, the diverse life stages (and, therefore, financial requirements) encompassed by the millennial designation mean there’s no one-and-done millennial solution.

Capturing the hearts and wallets of millennials requires a strategic approach based on segmenting millennials according to age- and lifestyle-related needs and executing with commitment over time—and by time, I mean years. Why? Because younger millennials are unlikely to deliver significant ROI early on; the return comes over time, as their financial needs mature and you create, deliver, and communicate the availability of products and services that meet their evolving needs and use the channels with which they’re comfortable.

The concept of delayed profitability may be hard to swallow, but what’s even harder to swallow is the possibility of losing your shot at this huge demographic bubble and watching your retail bank revenue decline 10-25 percent by 2025, as some predict, if millennials develop financial habits and preferences that don’t include you.

Is it possible to monetize the youngest segment of millennials—older high schoolers and young college students? Realistically, no. At this point, their financial lives are largely an extension of their parents’. And, the parts of their financial lives not linked to their parents tend to be purposefully cash-based. On the “income” side, they’re likely to receive wages, tips, and gifts in cash. And, on the “expense” side, cash is the most convenient way for them to share costs with friends and pay for purchases without attracting parental attention. Certainly, a variety of products have been targeted at this segment, but the successes have been few and far between, not scalable, and not highly replicable.

Older college students and young people just entering the workplace is where it gets interesting. On one hand, this group is developing financial needs independent of their parents and, likely for the first time, acquiring the means to be financially independent, even if they’re still living at home. On the other hand, this group is a product of its time. These millennials are tech-savvy, glued to their mobile devices, insanely committed to their online social lives, and brand-loyal—but only if the brand supports their lifestyle and aligns with sensibilities. And, this is the golden moment of opportunity to establish a relationship that you’ll nurture to profitability by meeting their evolving needs as they go about living their lives.

What if you could offer these millennials a banking product they actually want to use—one that seamlessly combines the banking functionality and money management tools they need with the online activities they like, including social interaction, local deals, reviews, and money saving opportunities—all through a single lifestyle app? That’s what we’ve created at Urban FT, based on years dedicated to understanding millennials’ needs and expectations. And, we believe this unique combination is the cost-effective foundation to launch a relationship with millennials that can make them customers for life.

Once you’ve engaged millennials, the next step is keeping them engaged by recognizing that as they mature, their financial needs mature too. If you’ve delighted them with a banking product they actually want to use, you’ve earned their loyalty and trust and you’re well positioned to take your relationship to the next level by proactively introducing age- and lifestyle-related products that will justify your investment in these young customers.

Retail banking is in a new era. Margins are compressed, regulatory hurdles and expenses have grown, and technology has unleashed a torrent of new opportunities and new competition. And, millennials—the financial services revenue generators of the future—have options that could disintermediate traditional financial institutions. But traditional financial institutions have strengths, too, that the fintech disruptors don’t, including brand trust, the resources to serve customers’ needs as they develop, and the ability to innovate—even if they aren’t always on the leading edge. It’s time to put the short-term thinking of the past behind us and to think like strategic marketers, recognizing the huge opportunity of the millennial market, and planning for success.

Monetizing Millenials


Thoroughly understand the segment’s behavioral drivers, attitudes, and influencers, along with realistically evaluating their financial services needs.


Invest in products, services, channels, and messaging that resonate with millennials, capturing their hearts and wallets at the point they become financially liberated from their parents.


Recognize that millennials’ needs change as they mature, and anticipate how those changes affect their financial services needs. To achieve your ROI goals, communicate proactively and consultatively about products and services that address their maturing needs.


Monetizing millennials requires the patience to understand that ROI develops through trusting relationships that are nurtured over time and put the needs and sensibilities of customers first.

Richard Steggall took part in the panel discussion What’s in a name? Why millenials will embrace alternative financial services on Monday 21st March at All Payments Expo in New Orleans.

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