Financial services providers are failing to connect with millennials, but social media isnt the solution, according to new research by Bank of New York Mellon and the University of Oxford's Said Business School.
When asked how their contact with financial services providers could be improved, less than 1% of millennials surveyed by Said undergraduates for The Generation Game: Savings for the New Millennial, said that they want financial services providers to connect with them through social media.
What struck me is that while millennials are generally comfortable about being targeted by consumer brands through social media, they do not want financial services providers using these channels to contact them, said Shayantan Rahman, student lead for the research team. Rather than being the solution for helping engage with millennials, many told us they think it makes them look silly, pally or creepy.
The study of millennials by millennials reveals the disconnect that the financial services industry has with this generation, Janet Smart, undergraduate course director at Said, said in a statement.
The study also examined demographic groups saving priorities, attitudes about retirement planning and expectations around different types of financial institutions in the United States and other major global markets.
Increased longevity and the erosion of state and employer retirement provision mean that millennials will have to save more than their parents and do so over a longer period, according to the study.
Pensions need to be better explained to millennials because nearly half (49%) said that they dont know how pensions work, the study found.
Millennials are also twice as likely to turn to their parents for financial advice (52%) than to the next most popular source of information: their banks (24%).
In addition, 59% of millennials said that they havent seen products targeted at people like them.
Millennials say that they want products that demonstrate clearly that they are being rewarded for tying up their money.
Insurers and other financial services providers need to reach out to millennials in different ways, BNY Mellon global insurance industry lead Vincent Pacilio said.
In the short term, they should identify millennials as a distinct target for marketing activity and find avenues to better equip parents to advise their children, he said. In the long term, they need to think of innovative ways of working with policy makers to move away from a single purpose tax-incentivized retirement pot toward a tax-incentivized savings pot that allows for a certain number of lifetime drawdowns.