With Millennials’ Confusing Credit Behavior, Banks Need to Keep Pace With Innovation

When I read the results of a survey where only 33 percent of millennials reported owning a credit card, that number seemed a bit low.1

On the surface it made sense that some consumers between the ages of 18-29 were possibly shell-shocked from the Great Recession and averse to drumming up debt.

Then I saw a subsequent report with a different set of findings showing that not only did 83 percent of millennials (25-34 years old) surveyed report using credit cards, 37 percent of millennials are likely to apply for a new credit card over the next 6 months.2

Regardless of which research you read, what I find much more interesting is the data on underlying behavior and motivations of millennials regarding their appetite for innovation.

That’s where my team and our financial institution clients are focusing.

Banks Need to Keep Pace With Innovation

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Tapping into Massive Millennial Market with New Tools and Technologies

Undeniably, the millennial market is gigantic. According to data provided by Accenture, there are approximately 80 million millennials spending more than $600 billion annually, a rate that will increase to $1.4 trillion by 2020, representing 30% of total retail sales in the future.

Those are big numbers. And they all need some way to pay in an increasingly cashless culture. 

The thing is, millennials don't necessarily dislike banks — they just want banks to give them better reasons to engage. That’s why our product roadmap has plenty of areas of innovation that are of great interest to institutions formulating their millennial strategies. Here are just three recurring themes I see come up in client meetings:

Loyalty & Rewards Programs: For those millennials who carry credit cards, 88 percent surveyed said rewards are among the most important factors when selecting a card.3 That’s a huge differentiator an institution can add to its arsenal. Loyalty and rewards programs can be customized and periodically tweaked to increase card usage and delight. And advancements in analytics allow more visibility and flexibility in program design than ever before. Personalized offers help enhance your brand and attract and retain new customers. 

Mobile Wallets:  It’s no secret millennials are married to their mobile devices and among the demographic leaders in adoption of mobile wallets. Moreover, 84 percent of millennials surveyed are more likely to use mobile payments if loyalty rewards and discounts are automatically applied, and 82 percent are more likely to use the loyalty card if it’s on their phone.4 As mobile wallets gain in popularity, both with consumers and businesses, financial institutions should formulate strategies for how they will integrate their cards into mobile wallets being used by their millennial customers.4

More Personalization, Customizable Control: An OpenMarket study we came across found that 76 percent of millennials prefer to receive texts over calls (reasons cited: less invasive, more personal, makes them feel valued), 59 percent receive text account information, payment reminders, and fraud alerts, and 62 percent receive text product offers or coupons.5 Provide your cardholders with the power to configure account controls and alerts anywhere, anytime, from any mobile device, and push them updates and offers driven by their behavior. When you can give your customers more control over their card account activity, you become more than their banker. You become an essential part of their financial health.

These are just some of the many exciting areas of innovation where we’re partnering with our financial institution and large enterprise clients to meet the growing appetite for payment innovation.

INTERESTED IN LEARNING MORE? Request a free briefing with one of our Credit Processing Solutions Specialists.





1. Survey: Surprisingly few millennials carry credit cards, Bankrate and Princeton Survey Research Associates, 2016.

2. FICO Survey: Millennials Still Want Credit Cards, FICO, June 2016.

3. Survey of consumers conducted online in the United States by Harris Poll on behalf of NerdWallet, April 19-21, Published May 2016

4. “The State of Mobile Wallet Marketing,” Urban Airship, 2016.

5. “Why Millennials Text Rather than Talk,” OpenMarket, 2016.