For marketers and ad agencies, attracting the coveted Millennial crowd has topped the priority list for 2015 and is showing no signs of slowing down. There are about 90 million Millennials in the U.S., and over 20% of them are Hispanic. And while this burgeoning group of trendsetters may not have the cash to spend like their Boomer parents, many are entering their peak earning years, which translates into increased purchasing power.
In a recent study, one of three we’ve conducted in conjunction with Sensis , we decided to take a closer look at how Hispanic Millennials (HM) acted on and felt about their finances and compared them with the actions and feelings of White/non-Hispanic Millennials (NHM), Asian Millennials (AM), and African-American Millennials (AAM). And this is what we found:
When asked if they paid off their credit cards “in full” each month, 49% of Hispanic Millennials completely or somewhat agreed, while Asian Millennials were at 61%. NHMs and AAMs were both at 46%.
Likewise, when asked if they had enough money put away for a “rainy day,” Asian Millennials came out on top at 54% vs. Hispanic Millennials at 48% (followed by non-Hispanics and African-Americans).
For most basic financial products – credit cards, checking & savings accounts, etc. – the familiarity with those products by each of the four groups runs about the same and at a very high rate. But a few products resonate at different levels.
For example, when asked how familiar they were with retirement savings plans (e.g. 401ks), 71% of African-American Millennials were very or somewhat familiar, but it dropped to 58% for Hispanics.
Similarly, for “payday loans,” African-Americans, at 65%, took the lead with Hispanics trailing at 49%. Finally, when asked about mutual funds, African-Americans expressed awareness at 52%, Hispanics at 40%.
Across the four Millennial groups, Hispanics have the most positive feelings toward banks and financial institutions, with 61% rating their opinion as very or somewhat positive, dropping to 55% for Non-Hispanic Millennials.
Interestingly, how they engage their banks vary, based on the activity needed. When opening a new account, 60% still want to do it in person, compared to just 29% who would rather go online. The same goes for obtaining a mortgage – 61% in-person vs. 22% online.
That dynamic completely shifts, however, when looking at other kinds of transactions, such as paying bills – 54% of Hispanic Millennials would rather do so online vs. 28% in-person. Likewise when transferring money between accounts, 49% prefer online and 28% in-person.
And while convenience, good customer service, and low fees are important when selecting their banks, 34% of Hispanic Millennials say that “language factors” are very or somewhat important when choosing a financial institution, as much as 17% higher than the other groups.
Finally, while the four Millennial groups think all traditional banks are about the same, Hispanics are clearly the most adventurous when considering non-traditional institutions, while non-Hispanics are the least willing to try something new:
Feeling the Pressure
Perhaps the most intriguing of the questions – because the study also explored emotions – was about feeling “financially overwhelmed.” Here, Hispanic Millennials seemed to be on the most solid ground.
Only 43% of Hispanic Millennials completely or somewhat agreed that they were overwhelmed, lower than all the other groups.
We’ve drawn a few conclusions:
Lastly, understand that there is an enormous opportunity for businesses in the financial services sector – traditional and non-traditional banks, credit card companies, and investment firms – to explore the gaps this study uncovered. Get there first.