Millennials are expected to hold $24 trillion of the world’s private wealth by 2020, which is roughly 1,5 times the national output of the US in 2015.
This is according to the latest white paper of the UBS Chief Investment Office Wealth Management called “Millennials – the global guardians of the capital”.
The study revealed that millennials, who currently hold USD 17trn of world’s private wealth, have three drivers that distinguish them from other generations:
UBS states that the Generation Y wants convenient, on-demand access to goods and services, which includes online market places, transportation, and online food shopping.
This desire for greater convenience extends to financial services, as 69% of UK millennials would like to use their mobile phone as a replacement to a physical card for point-of-sale transactions, versus 40% of baby boomers, according to a 2016 McKinsey’s consumer survey.
The same survey uncovered that millennials are more than twice as likely as baby boomers to ask for a mobile banking service that allows financial advice via in-app chat or video conference.
- Multi-channel delivery
Millennials also prefer to interact with companies through digital modes of communication, including social media.
This encompasses multi-channel delivery of financial services. The same McKinsey’s consumer survey revealed that millennials transact business with their principal bank 52 times a year via internet banking, compared to 42 times a year for baby boomers.
Millennials also visit branches nearly twice as often as baby boomers (29 times versus 16 times respectively), and engage with a broker or agent three times as often.
In the meantime the millennial generation is more open to share personal information when it comes to financial services if it allows to have a more convenient or personal service.
McKinsey’s study stated 57% of millennials would use biometric identification for their mobile-banking log-in, more than 20% more than baby boomers.
In addition 57% of millennials versus 32% of baby boomers would be prepared to share details of their savings target with family and friends if this would allow trusted individuals to offer more tailored advice on how to achieve their goals.
UBS Wealth Management specialists said in order to keep up with the millennial generation, institutions should speed up provision of digital services like robo-advisory, bespoke portfolio analysis, and customized content.
The firm gives the following recommendations in order to tackle the issue:
- Institutions need to ensure a consistent experience that takes the best of automated and human-generated client service
- Redouble efforts to ensure that the content is delivered in the right digital format for users to access at their convenience, on any device, anywhere
- Continue to invest in omnichannel communication that allows users to communicate with a wider circle than just their client advisor.
The study also puts an emphasis on the creation of the 'platform-company' model, which should facilitate information sharing from all sources, and allow access to externally-generated information, products, or social connections.
This includes enabling user-generated content that matches a broad set of client affinities, passions, and goals and building data analysis tools that help to match clients with other users, content, and experts.