Millennials and Money: Disrupting Conventional Financial Services

Millennials are now well into their 30s and their priorities are shifting to a family-oriented way of life – weddings, children’s education, and buying a house – which requires savings and investment. This is a big shift away from what one generally associates with millennials – being lifestyle-oriented and living for the moment. As a result, financial services providers are looking for new ways to attract millennials, and to make savings and investment not just necessary but relevant and attractive.

An awakening for marketing gurus

A survey from Edelman Millenials and Money 2018 reports that a majority of young people (76%) see shopping for financial service products as a lot more difficult and less fun than shopping for other types of products and services. These findings are also supported by millennial’s impressions that financial services companies are intimidating, rigid and not people-friendly because they have been slow to use technology to customize the customer experience.

Numbering around 80 million in Indonesia, and with a direct annual spending power of $200 billion, the millennial generation is a huge opportunity for financial services companies.

However, to be successful, conventional financial products and services must be adapted and re-invented to meet the whims of the millennials.

Human-centred-design for customisation

In Indonesia for example, BTPN (Bank Tabungan Pensiunan Nasional) – a national pension bank – renewed their product offerings and services, and re-vamped their marketing strategies, to target young people through trendy financial products with technology at their heart. The use of human-centred-design also appeared in the process of their innovation. In order to come out with a new designated product, a team of developers worked together with their customers and prospective customers in the field to co-design the most suitable and targeted services.

rawpixel-579263-unsplashCo-designing a financial product with your clients for a more effective result. Photo source: link

Aware that millennials are tech-savvy, Jenius s built around the needs of today’s digitally literate customers, by including convenient shopping and savings features such as an e-wallet, Visa paywave and Dream Savers into the phone application. Financial services are now at millennial’s  fingertips.

BTPN, which had previously focused on pension-age customers, and very traditional products and services, is being transformed into a modern financial services company that caters to a younger personr’s lifestyle and image.

Although tech-savvy, millennials can be challenging to persuade, and this is where attractive marketing strategies using channels that are young-people-friendly – such as online marketing, visual content and information bites – can be very effective.

rawpixel-557123-unsplashTo increase financial literacy rates among millennials – providers must be creative. Photo source: link

For example, an Indonesian based financial consultant, Jouska, has attracted 319K followers on Instagram by giving daily lectures (through Instagram stories) about investment and financial management tips using a highly-compelling narrative and engagement strategy. It gives life to financial literacy.

Government not being left behind

The Indonesian government has also realised that millennials are a strategic market, releasing a Retail Saving Bonds (SBR003) in May 2018 with a focus on millennial buyers – by opening with a minimum investment as low as IDR 1,000,000.

Issued through e-SBN, SBR003 was taken up by 7,642 investors across Indonesia with 5,683 of them first-time Bonds investors, with the majority aged 25-40 years-old. This early exposure to financial investment amongst young people is providing a fresh wind for financial markets in the country.

It’s just the beginning

The increased popularity of alternative financial products and services amongst the younger generation demonstrates that it is important to enter the heart of the market – and listen to users with empathy and understanding. After all, as a millennial myself, we do care about our financial future.

Editor: Yani Lauwoie

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Putu Monica Christy

Monica is Program Manager for Tulodo. She is passionate about entrepreneurship and behavior change in low-income communities. If she is not glued to her laptop, she enjoys solo-travelling and taking a nap at the park.

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