This attention was, to a large extent, well-deserved, since the arrival of every new generation sends ripples throughout the financial landscape, and Millennials that were raised in the digital era and experienced the uncertainties the global financial crises present a sharp contrast to the declining Gen X.
So let us take a look then at some of the most important ways the people born between 1980 and 2000 are changing the financial world and what we can learn from these gradual but critical developments.
A giant push for the mobile banking
If there is one famous, almost stereotypical trait that first comes to mind discussing the Millennials’ habits, it has to be an on-the-go attitude and the desire for immediate information. This simple habit did have a great impact on the financial world and has considerably sped up the development of mobile banking tools and apps. Of course, this development is not limited to the technical level. The evolution of mobile banking has simplified and streamlined bill payments, financial transactions, deposits, withdrawals, and similar daily services making the whole banking system more efficient, leaner, and much faster.
A more positive attitude toward saving
Making the banking services simple and easily accessible with only a couple of clicks had another very interesting consequence – the Millennial generation has demonstrated a much more positive attitude toward saving than the previous generation and the threshold for using the banking services continues to drop to this very date. According to the 2016 report, digital banking has experienced tremendous growth amongst users aged 18 to 24, reaching the number of 82% of respondents. This high adoption rate also increases the probability of using advancing services and moving money to savings accounts.
Focus on short-term financial goals
This might be the consequence of the 2008 recession but, be that as it may, the Millennials are very distrustful toward long-term financial commitments, and this attitude can be most easily observed in the businesses sector that is now, pretty much ruled by Gen Y. For instance, the business sector has, as of recently, experienced great popularity of trade finance services that allow business owners to get low-interest loans and quickly patch up small cash flow gaps without engaging in any sort of long-term financial commitment. This laser focus on immediate goals can be seen across the entire business world.
Experiences are more important than possessions
Unlike the generations like Baby Boomers that were focused on the acquisition of wealth and goods, Millennials seem less obsessed with earthly possessions and more focused on pleasant experiences. That, however, doesn’t make them any less consumerist than their predecessors. On the contrary – the wealth is simply distributed to the sectors able to satisfy these needs like the hospitality industry, tourism, IT industry, and travel. According to recent research, Millennials are, on average, spending $5,700 on travel which is more than double the money spent by Boomers, and take as many as five trips per year.
The ongoing growth of ecommerce industry
The present-day ecommerce market is a perfect storm of different factors ranging from the evolution of the IT industry to the unfortunate outbreak of COVID-19. No one can deny, though, that the Millennials’ purchase habits play a large role in this extraordinary growth. The recent stats describing Gen Y’s spending habits showcase that the penetration rate of online shopping amongst the Millennials reached a record-breaking number of 86.2%. Other research indicates that this generation conducts as much as 54% of purchases online. These numbers present a tremendous force in the present-day business world.
Subscription-based streaming mindset
Last but not least, it should be mentioned that Millennials’ mindset ruled by convenience, freedom of choice, simplicity, and instant gratification plays extraordinarily well with the subscription-based streaming business model. Of course, the best example of this tendency can be found in the entertainment industry where streaming platforms like Netflix and Hulu are completely changing the way we consume visual content. But, this convenient business model is also taking strong roots in education, the music industry, cloud computing, and virtually any form of service that can be used online.
We hope these few examples gave you a general idea about the tremendous impact the Millennials are having on the financial world and some of the repercussions this sway may cause in the following years. Taking the business world away from the previously dominant Gen X, Millennials have shown a great habit of adapting the existing world and infrastructure to their unique worldview. Until Generation Z starts making the same imprint we are going to live in the financial environment made in the Millennial image. It’s good to know in which direction this road is heading.
Lilly Miller is a freelance writer, who focuses on the latest business trends, commercial design, and environmental issues. She also loves to experiment on daring new home decor trends and write about it as a regular contributor to Smooth Decorator. Settled in Sydney for the time being, Lilly shares home with two loving dogs and a gecko named Rodney. You can find her hanging out on Twitter.