The Unbanked Generation:

A Guide to the Financial Habits of Millennials

The millennial generation — those born between 1981 and 2005 — is the biggest in history, even bigger than one of the most significant generations of our time, the Baby Boomers. It is also the first completely digital generation, living almost entirely on their smartphones. If banks are going to bring these millennials into the fold, they’re going to have to meet them halfway – if not more.


Millennials by the Numbers



Americans Born

Remember the Boomers? Now think bigger. There are 80 million Americans who were born between 1981 and 2005. The Baby Boomers, the previous largest generation, totaled 77 million Americans.


Millennials Peak

This generation is still very young: the oldest millennial will turn 34 this year, in 2015. They won't begin to reach their peak earning age until 2020.


of all U.S income

Even though this generation controlled $2 trillion in liquid assets in 2014, that amount is forecast to grow to $7 trillion by 2020. By 2025, they are expected to generate 46% of all U.S. income.


Millennials are the financial force of tomorrow.


Millennials and Electronics

It wouldn't be entirely accurate to say that millennials live their lives online. What they really do is live their lives on their phones.



of millennials aged 25 to 34 are smartphone users


Millennials recognize that there are security questions that arise when you live on your phone. According to a Deloitte Center for Financial Services report, 54% of consumers under 35 years old are concerned about the security of mobile devices for banking purposes.


The best way to get millennials' attention is on their smartphones.


Millennials and Banking

Many millennials would never think of ducking into a bank branch to take care of their financial needs, or even writing out a check. More than a fifth of all millennials have never even written a physical check to pay a bill. 63% of adult millennials don't even have a credit card. By comparison, only 35% of consumers over 30 don’t have credit cards.

It’s no surprise that 94% of consumers under 35 years old are active users of online banking. Another 27% would consider a branchless digital bank. So, many things that are considered part of a traditional banking relationship, millennials are now doing on their smartphones:

use apps and mobile tools to make bill payments.

view statements.

view bills and transaction histories.

set up automated recurring payments.


Millennials want to hold their bank at arm’s length:


would rather go to the dentist than listen to what banks say.


believe they won't need a bank in five years.


consider their banking relationship to be transactional rather than relationship-driven.


are open to switching banks within the next 90 days.


Millennials are increasingly using online payment methods in place of cash and checks:


of consumers have already transferred money to someone electronically.


Mobile payments are expected to reach close to $90 billion by 2017


So how are millennials using banks?
The top activities are checking account balances, paying bills, and transferring money.


are interested in real-time and forward-looking spending analysis.

of twentysomethings downloaded a money management app.

Now is the time to reach out to the millennial generation, not just in terms of technology, but also to deliver new ways to meet their evolving banking needs.

Smartphones are the new wallets. Millennials put their movie tickets, boarding passes and reward cards on them, as well as their financial tools including debit cards, credit cards and payment systems. The growing acceptance of P2P is an opportunity for financial institutions to differentiate themselves with innovative new services that complement existing online bill pay and money transfer services – services that only banks can provide.


Millennials want to interact with banks on their own terms.


The Must-Do list

Young consumers receive virtually all correspondence electronically. The concept of a checkbook is foreign. The arc of financial institution research zeroes in on a consistent and unsurprising set of preferences and expectations:

  • Millennials expect real-time information on their deposit and credit accounts.
  • Millennials expect their financial institution to keep current with their preference to transact electronically.
  • Millennials expect a "smooth and easy" experience.
  • Millennials love quirky personalization.
  • Millennials expect to be able to decide what account information they want and how they want to receive it.
  • Millennials are accustomed to seeing alerts based on choice of frequency and type of information they believe will help them.
  • Millennials like options and control when it comes to their card usage.
  • Millennials want to be able to flip through their messages and gather new information on the fly.

What financial institutions should be doing right now:

  • Be accessible in real-time all the time.
  • Communicate how they want to be communicated to (i.e., text reminders for alerts and promotions).
  • Have an app for everything: smooth and easy for all platforms, from whatever the device.
  • Be a partner; help millennials navigate toward a solution.
  • Demonstrate innovation: create experiences that are interactive and empower.

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