"Generation Lost: Engaging Millennials with Retirement Saving" is a new study by BNY Mellon and Cambridge Judge Business School, University of Cambridge that surveyed 1,253 millennials between July and September this year. In this extract from the study, BNY Mellon’s Paul Traynor, head of Insurance for EMEA, APAC & LatAm, talks about what financial services providers need to do to connect with Millennials.
Millennials face considerably greater challenges than their parents when it comes to providing for their retirement. But this group, which comprises those born between 1980 and the turn of the millennium, are not being told about the scale of the savings mountain they must climb.
Financial services providers such as life insurers, banks and asset managers are losing the battle to engage with this generation of potential new customers. Senior executives within these organisations are guilty of the same short-sightedness towards the long-term health of the businesses they run as Millennials are towards their retirement saving.
Root and branch reform of financial education is needed to equip future generations to bear the increasing burden they will personally have to carry in providing for their retirement. Social Finance offers financial services providers a way to speak to Millennials in a way traditional investments do not. Financial services providers can better connect with Millennials by being more honest about the challenges they face. New ways of thinking are required if undersaving Millennials are not to become Generation Lost.
Helping future generations to tackle the demographic, cultural and macro-economic challenges of retirement provision is as important to BNY Mellon as it is to our many partners in the world of life insurance.
The findings of the study paint a picture of a generation that is ignorant of financial matters because it is being ignored. If financial services providers do not connect with tomorrow’s customers they will either desert the insurance industry in favour of channels that speak their language or ignore saving altogether.
Without a new approach we face a real risk that the millennial generation will become Generation Lost – lost both to the insurance industry and in terms of its own retirement readiness.
This research leads me to believe insurers and other financial services providers can achieve engagement with Millennials by: engaging with Social Finance products and putting their existing socially responsible investment offerings at the forefront; promoting financial education for young people; speaking to Millennials in language they understand, with more honest, confrontational and shocking messages around retirement readiness; and working to shape policy and design products that meet the changing needs of today’s young people.
To view the report, please click here.