Millennials and their mobiles matter most, and they’re voting with their money

UK millennials have surpassed all other demographics to become the most valuable group for financial institutions, new research reveals.

A new global report released by Telstra reveals that United Kingdom (UK) millennials have become the most valuable demographic group for financial institutions with UK millennials’ average wallet size now 40 per cent greater than the UK adult demographic. As millennials drive interactions and demand mobile engagement in a manner never before seen in financial services, traditional institutions need to adopt a mobile-first digital strategy or risk disruption from bourgeoning digital challengers.

In the “Exponential Performance – in a Millennial, Mobile, Programmatic World” report, Telstra has commissioned the inaugural Millennial, Mobile, Money Index (3MI) to observe how well financial institutions are transforming their businesses and models in response to demographic and digital disruptive trends.

“Millennials, their consumption of mobile digital and wallet size have undoubtedly become lead indicators of performance for financial institutions,” said Rocky Scopelliti, Telstra’s Global Industry Executive for Financial Services.

Telstra’s research found that UK millennials average wallet size has now overtaken all other demographic segments by the largest margin compared to other countries studied, making millennials more lucrative to the financial services sector than ever before. As digital challengers continue their relentless growth in the UK market, leveraging programmable disruptive technologies to transform and compete against new breeds of organisations is an imperative for traditional institutions,” said Mr Scopelliti.

Telstra’s comparison of UK main banks across the 3MI™ found that Barclays Bank has the largest proportion of millennials among its customer base (42 per cent), the largest main bank market share (16 per cent) and Barclays Bank millennial customers are most likely to engage with the bank via mobile banking – over 70 per cent do so each month.

Ashok Vaswani, CEO of Barclays UK, said “It’s encouraging to see the digital transformation of our business making a real impact with customers. People in the UK are living increasingly connected lives and the rapid adoption of our mobile services is a great strength for Barclays in the UK.

“I believe that a mobile first approach is making banking easier, more convenient and more intuitive for customers as we connect them to new services and value. I believe this can be a winning strategy not just with millennial customers, but for all the customers we serve.”

Telstra’s additional research of 164 global financial services executives found that most traditional organisations still need to transform legacy business models to become more agile against digital challengers. Digital challengers that leverage accelerating technologies such as artificial intelligence, cloud, APIs and robotic process automation, can enjoy cost savings of 67 per cent in operating expenses and 98 per cent on customer acquisition.

“Investing in the right programmable technology to radically reduce either the cost of customer acquisition or the marginal cost of service will give rise to a modern financial services institution that is digitally-led and can provide intricate and meaningful services that react to the needs of a demanding, mobile millennial in real-time,” Mr Scopelliti said.