Millennials won’t hesitate to abandon loyalty for better products and services, according to a survey conducted on behalf of Experian Consumer Services.
The generation is coming of financial age at a unique time, being greatly affected by the recession and the explosive advancement of personal technology. This new data shows that they have developed different views toward managing money, using credit and how they expect financial services to be delivered.
“The findings validate the kind of innovation Experian is focusing on -- things that appeal to Millennials’ expectations around ease of use and accessibility,” Guy Abramo, president, Experian Consumer Services, tells Marketing Daily. “Those expectations really resonate with all consumer segments, though -- Millennials are just more vocal and drive the change.”
Many Millennials (46%) look for new financial companies/services that better meet their needs. More than 3 out of 4 Millennials will switch financial accounts if they find a better alternative. Most frequently mentioned reasons to switch include: better interest rates (47%), better reward programs (43%), better identity protection (32%) and better customer service (35%), among others.
This generation embraces technology and are quick to try new offerings -- at the expense of loyalty, according to the survey.
The majority of Millennials (57%) use financial mobile apps to manage their finances, Millennials have, on average, three financial apps on their phones.
Most (57%) Millennials are willing to use alternative companies/services that innovate to better meet their needs. A significant number (39%) are familiar with “non-bank” lenders (e.g., Prosper, Lending Tree, Upstart), and 13% have already used such a service. Nearly half (47%) will likely use alternative lenders in the future, citing easier application process, not dependent solely on credit score, more accessible, faster review process and digital savvy.
They have conflicted feelings about their personal finances; they are uncertain but lean toward optimism. A surprising number lack knowledge about credit -- or show apathy toward it. A majority have had their credit, loan or lease attempts impacted -- positively or negatively -- by credit scores.
“They need to better understand credit and personal finance, that’s another area where they aren’t unique,” Abramo says. “We will continue to make credit education a priority in our marketing and that, combined with a sharp focus on improving product and experience, will increase our brand perception even more.”
Millennials miss the mark when estimating their generation’s average credit score (654 [est.] vs. 625 [actual]), average debt $26,610 [est.] vs. $52,210 [actual], and average debt, excluding mortgage ($12,580 [est.] vs. $26,485 [actual]).
Despite being associated most closely with student loan debt, credit card debt takes first position as the most common Millennial debt (38%), followed closely by student loans (36%). Others, in descending order, are: auto loans (28%), home loans (20%), personal loans (17%) and “other” (14%).
Research firm Edelman Berland conducted a national online survey of 1,002 Millennials (ages 19-34) from Aug. 14-19, 2015. The research objective was to garner mediagenic data around Millennials’ perceived financial situation and credit score to compare against and expand upon existing Experian data. The margin of error is plus or minus 3.1% overall. The survey follows a July 2015 report from Experian that analyzed credit bureau data and placed Millennials last in generational credit score rankings.