Millennials, those born between the early 1980s and the turn of the millennium, comprise roughly 22 per cent (5.22 million) of Australia’s population.
They also make up the largest cohort in the workforce and will comprise 42 per cent of it by 2020.
For the financial services industry, this impact makes it incumbent for us to engage them today.
But much of what separates this generation also defines the way in which businesses have to behave in order to engage them.
Millennials are a generation whose lives so far have run parallel to a timeline of rapid technological change, from the advent of the home computer and internet to mobile phones.
They are the generation looking down the barrel at upcoming technology too, with the rise of artificial intelligence and other new ways of working, communicating and navigating our globe.
Similarly, the financial landscape has been carved out alongside these movements in technology – from the dotcom bubble of the late 90s to the global financial crisis of 2008 (the aftershocks of which are still felt today).
Here in Australia, a vastly different economic landscape has thrown up some challenges for Millennials who, with the median house price in Sydney reaching a million dollars, could be priced out of much of the market.
With this macroeconomic background, the advice community needs to expect the wants and needs of Millennials will be different to their precursors.
The technological and financial changes mean Millennials are operating in a vastly uncharted terrain.
They face considerably different challenges than their parents did when it comes to their financial future, which means for the financial services industry, the time to engage them is now. But how?
The key is the digital nature of their environment. Printed media is a thing of the past as Millennials opt to receive their information online.
Face-to-face interaction, from bank tellers to checkout operators at the local grocery store, is being replaced by automation, creating quick and easy ways of transacting.
This is where fintech has an important role to play. Millennials won’t go and wait in a bank queue, nor are they going to go out and seek financial advice.
It needs to be on their terms, at the touch of their fingertips. Nowhere in the landscape is more qualified to do this than Australia’s burgeoning fintech scene which speaks to Millennials in their language.
It’s a trend that is already taking hold, with Telstra’s Millennials, Mobiles & Money: The Forces Reinventing Financial Services report finding 67 per cent of Millennials globally preferred to receive advice on financial products and services via a digital platform.
The single biggest reason for preferring digital advice is a perception of greater independence, followed by an expectation of a faster response.
This is also something backed up through anecdotal feedback we’ve heard at Acorns.
It means that fintech should be seen as an integral part of an advice solution.
The intention is not for it to replace all face-to-face financial advice, but it is proof it can provide a valuable stepping stone to engagement or another piece of a wider financial advice solution.
In Australia, Acorns customers – the bulk of whom fit squarely into the Millennial age bracket – saved more than $1.6 million in round-ups alone in just one month, which will help them start the journey of building their financial future.
Millennials have the same financial needs as other generations, and given the macroeconomic environment surrounding them, it is arguably more important for them to have their finances in order.
It is incumbent on the advice community to use every means to engage them and fintech should be supported as a necessary part of that toolkit.
Brendan Malone is the chief operating officer of Acorns Australia.