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The Millennial Opportunity India | June 2015
Background There are 395 million millennials in India. This segment is vital to the Indian economy as they are a key economic driver for the future. This shift to a more technologically mobile, self-empowered generation will drastically change the primary buyer persona of ﬁnancial services ﬁrms around the world, thus forcing massive changes to their marketing strategies and business models. How can ﬁnancial services providers prepare for these drastic changes? LinkedIn and Ipsos recently conducted a global study of approximately 800 Millennials in India to help answer this question. The study worked to identify their preferences and behaviors regarding savings and investments, as well as their attitudes and beliefs about ﬁnancial services providers. It examined how Afﬂuent Millennials are reshaping the future of the ﬁnance industry, how they are preparing for their future today and how ﬁnancial institutions should reach, nurture and deepen relationships with afﬂuent millennials.
Methodology GLOBAL SURVEY GLOBAL SAMPLE 20 minute online survey, ﬁelded by LinkedIn and Ipsos in April 2015. 9,200 respondents in 10 countries: United States, Canada, United Kingdom, France, Netherlands, Australia, India, Singapore, Hong Kong and Brazil. Survey measured usage, engagement, attitudes and opinions on ﬁnancial services. Quota sampling/weighting applied to represent Internet users in each market. CRITERIA INDIA RESULTS Respondents were Millennial (18-34) and Gen X (35-49) Internet users. This report covers results from 802 total respondents in India, including: In India, Afﬂuent is deﬁned as more than 30 Lakhs but less than 2 Crore net investible assets, excluding real estate. 502 total Millennials (incl. 138 Afﬂuent) and 300 total Gen X (incl. 108 Afﬂuents).
RESEARCH OBJECTIVES Understand the differences between Millennials and Gen X with regard to brand afﬁnity, purchase process and information-gathering. Comprehend the role that social media plays and the inﬂuence that content and context has on the decision journey for retail ﬁnancial products. Examine the subset of Afﬂuent Millennials to understand their unique mindset, behaviors and expectations.
Key Findings Summary AFFLUENT MILLENNIALS ARE… ETERNAL OPTIMISTS INDEPENDENT OPEN MINDED Unparalleled in conﬁdence about their ﬁnancial future, happy to sacriﬁce now for the future and set ambitious life goals. Are happy to take on debt to fund their lifestyle goals Despite being loyal customers, Afﬂuent Millennials are open to ﬁnancial offerings from traditionally non-ﬁnancial brands and are early adopters of emerging payment technologies. Demonstrate stronger trust and loyalty with their current ﬁnancial services relationships. SOCIAL-CENTRIC Financial institution’s social networks are a must-have and central to Afﬂuent Millennial ﬁnancial decisions. Do ﬁnancial research on their own, however see intrinsic value in being able to validate this with a ﬁnancial advisor. HUNGRY FOR EDUCATIONAL INFO Top content includes peer reviews, expert opinions or commentary, thought leadership, educational content and information about product services.
AMBITIOUS, PROGRESSIVE & CONFIDENT: How This New Power Persona Is Reshaping The Finance Industry
Afﬂuent Millennials are utterly optimistic in their belief in the Indian dream % Agree: One ﬁnancial ideal is that every citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative. Is this ideal alive and possible today? MILLENNIALS GEN XERS To t a l : 8 5 % To t a l : 8 7 % Afﬂuent: 96% Afﬂuent: 93% Despite the belief in the Indian Dream, there is a concern about a potential future ﬁnancial crisis More than half of Afﬂuent Millennials anticipate another ﬁnancial crisis. This does not stop them having conﬁdence in India’s future economic growth, or the opportunity to invest in their future success, in line with other groups. Afﬂuent Millennials Millennials Afﬂuent Gen Xers Gen Xers 69% 60% 54% 60% 67% 64% 58% 59% 52% 39% 37% 30% I anticipate another ﬁnancial crisis to occur I am conﬁdent in my country's future economic growth The sacriﬁces I make now will pay off in the future
Afﬂuent Millennials expect to own their own destiny % Agree: I expect to be successful and advance quickly in my career “Millennials are different. They have grown up empowered and expect to have a more self-directed life.” MILLENNIALS - Mohamed El-Erian, Chief Economic Adviser of Allianz Total: 63% Afﬂuent: 68% Afﬂuent Millennials are prepared to head overseas for the right opportunities 58% 54% 45% 41% 39% 36% WORKERS Travel overseas for work opportunities LEARNERS AFFLUENT GEN X 22% GEN X AFFLUENT MILLENNIALS MILLENNIALS AFFLUENT GEN X GEN X AFFLUENT MILLENNIALS MILLENNIALS 32% Travel overseas for further education/ study
Afﬂuent Millennials deﬁne success through independence and freedom Afﬂuent Millennials Afﬂuent Gen Xers 15% 1.5x 10% FREEDOM TO DO WHAT YOU WANT 15% 2x 8% BEING ABLE TO TRAVEL & SEE THE WORLD 15% 3x 6% DOING FINANCIALLY BETTER THAN PARENTS
INDEPENDENT, YET SEEKING GUIDANCE: For Afﬂuent Millennials, Their Financial Future Starts Now
Sources of afﬂuence are shifting across generations Wages are losing dominance as the primary source of wealth. Among those who have acquired any assets from wages, Afﬂuent Gen X are more likely to say this is their primary source of wealth. Afﬂuent Millennials Afﬂuent Gen Xers % Primary source of wealth 54% 57% of 51% 69% of ROYALTIES SELF EMPLOYMENT SCHOLARSHIPS & GRANTS 1.8x Compared to Afﬂuent Gen X, Afﬂuent Millennials are more likely to have gained their assets from: 1.6x 1.4x Afﬂuent Millennials are more likely to carry debt Afﬂuent Millennials are more likely than Afﬂuent Gen X to have a personal or business loan to facilitate their entrepreneurial and life goals. HAVE AT LEAST ONE… Millennials Gen Xers 69% 68% Afﬂuent Millennials Afﬂuent Gen Xers 52% 43% 45% 35% 28% 27% 27% 14% Credit card with a balance Personal loan 18% 11% Business loan 18% 22% 8% Student loan 9%
Afﬂuent Millennials are more likely to save most of their monthly paycheck % OF PAYCHECK SAVED PER MONTH Afﬂuent Millennials Afﬂuent Gen Xers 25% + 50% + 70% 60% 33% 21% 1/3 of Afﬂuent Millennials save most of their paycheck Afﬂuent Millennials are more likely than Afﬂuent Gen X to have a brokerage account While brokerage accounts are standard, only 2 in 5 Afﬂuent Millennials has a brokerage account, highlighting the importance for ﬁnancial institutions to build relationships early as Millennials grow their wealth. HAVE AT LEAST ONE ACCOUNT… Afﬂuent Millennials Afﬂuent Gen Xers 42% 3 in 5 Afﬂuent Millennials have not yet started a retirement account 31% BROKERAGE (NON-RETIREMENT) 2 in 5 Afﬂuent Millennials have a brokerage account
Afﬂuent Millennials seek greater involvement and control in ﬁnancial decisions, but still validate decisions with advisors 55% 54% 47% AFFLUENT MILLENNIALS MILLENNIALS AFFLUENT MILLENNIALS MILLENNIALS 42% VALIDATOR Conduct their own research and investment decision but consult with advisor to validate SOLOIST Perform their own research, make decisions and execute trades Afﬂuent Millennials like to validate their research with ﬁnancial advisors, considering them a must-have Despite their tendency to do their own research and seek information on ﬁnancial decisions, 2 in 5 Afﬂuent Millennials are particularly likely to see value in having a ﬁnancial advisors for their current assets, similar to those in Generation X. A FINANCIAL ADVISOR IS A… Must-have AFFLUENT MILLENNIALS 38% Must-have AFFLUENT GEN XERS Nice to have 39% Unimportant 48% Nice to have 14% Unimportant 51% 10%
Once they are customers, Afﬂuent Millennials are highly loyal to their ﬁnancial institutions AMONG THOSE WITH MULTIPLE ACCOUNTS OF EACH TYPE, % WHO HOLD ALL WITH THE SAME INSTITUTION: CHECKING BROKERAGE RETIREMENT CREDIT CARD AFFLUENT MILLENNIALS: 76% AFFLUENT MILLENNIALS: 59% AFFLUENT MILLENNIALS: 52% AFFLUENT MILLENNIALS: 46% AFFLUENT GEN XERS: 31% AFFLUENT GEN XERS: 27% AFFLUENT GEN XERS: 36% AFFLUENT GEN XERS: 11% (no balance) More than three quarters of Afﬂuent Millennials with multiple checking accounts hold all of these at the same ﬁnancial institution. Very loyal Afﬂuent Millennials are signiﬁcantly more likely to say they are very loyal and plan to do more business with ﬁnancial institutions they work with. Somewhat loyal AFFLUENT MILLENNIALS Not loyal 51% AFFLUENT GEN XERS 46% 36% 57% 3% 7% The Indian Millennial and Gen X populations are trusting of ﬁnancial services brands, particularly afﬂuent individuals 92% AFFLUENT GEN X GEN X AFFLUENT MILLENNIALS MILLENNIALS 80% The afﬂuent segment’s loyalty as customers isn't surprising when we see that they are more likely to trust the ﬁnancial institutions they work with. 90% 84%
However, the Indian population is open to ﬁnancial offerings from traditionally non-ﬁnancial brands. 70% 73% 71% 65% Likelihood to try services from a non-ﬁnancial brand Millennials Afﬂuent Millennials Gen Xers Afﬂuent Gen Xers And Afﬂuent Millennials already have high adoption rates of NFC mobile payment platforms Two in three Afﬂuent Millennials use a mobile payment service Millennials 59% Afﬂuent Millennials Gen Xers Afﬂuent Gen Xers 63% 69% 43% 43% 32% 28% 16% 15% 20% 11% 9% BRAND BIZ: Which of these companies do you currently use?
HIGH EXPECTATIONS & BIG DEMANDS: Afﬂuent Millennials Want A Deeper Connection With Financial Services Providers
When choosing ﬁnancial institutions, privacy and positive online buzz are important to Afﬂuent Millennials FIVE KEY FACTORS OF IMPORTANCE TO AFFLUENT MILLENNIALS PRIVACY SOCIAL PRESENCE WEBSITE Offers a high degree of privacy and has a good security track record Company has positive online buzz Offers a website that has all the banking features I need PURPOSE EXPERTISE Company has a community mission you care about Company has ﬁnancial advisors with a great deal of experience
Afﬂuent Millennials consider social networks a must-have and are central to their ﬁnancial decisions Must-have Nice to have Unimportant 52% MILLENNIALS AFFLUENT MILLENNIALS 39% 60% AFFLUENT MILLENNIALS USE SOCIAL NETWORKS MORE THAN GEN X TO: 9% 32% 8% Inform personal ﬁnance/investment decisions Must-have Nice to have 47% GEN XERS AFFLUENT GEN XERS Unimportant 42% 56% 65% 10% 39% Seek content from ﬁnancial companies 6% 64% Peer opinions, thought leadership and product reviews top content for Afﬂuent Millennials on social networks % of Afﬂuent users that use at least 1 social network to obtain this type of info PEER OPINIONS THOUGHT LEADERSHIP 93% 92% 82% AFFLUENT MILLENNIALS AFFLUENT GEN XERS EDUCATIONAL CONTENT 90% 76% AFFLUENT MILLENNIALS AFFLUENT GEN XERS 67% AFFLUENT MILLENNIALS AFFLUENT GEN XERS
Afﬂuent Millennials are especially active on LinkedIn COMPARED TO THE GENERAL POPULATION ON LINKEDIN, AFFLUENT MILLENNIALS ON LINKEDIN HAVE: 2x AS MANY 13x AS MANY CONNECTIONS COMPANY FOLLOWS GROUP ACTIVITY SHARES Source: LinkedIn behavioral data, GLOBAL, May 2015 FINANCE TOPIC SHARES
Implications and opportunities for FS marketers Opportunities available to ﬁnancial services providers to successfully navigate potentially tumultuous times and even thrive through it all. PERSONALIZE AND SOCIALIZE Afﬂuent Millennials are hungry for information that can be directly applied to their speciﬁc ﬁnancial situation and they are looking for it within social networks. Financial services providers should leverage the social networks to provide relevant content. ESTABLISH LOYALTY EARLY EXPERT ADVICE TO ESTABLISH TRUST AND ENABLE INDEPENDENCE Earn trust and build relationships with Afﬂuent Millennials by delivering the balance of expert advice and encouraged independence they crave. Transform the customer relationship by providing vital resources that support customers daily activities. RETIREMENT PLANNING Afﬂuent Millennials have proven to be extremely loyal once their trust is won. 3 in 5 Afﬂuent Millennials do not have retirement accounts. Financial services providers should reach out to Afﬂuent Millennials now and build relationships with them before the non-traditional competition is able to. Establish relationships with Afﬂuent Millennials now, becoming their trusted advisors to help cast a vision and execute a plan for retirement. Earn their trust and secure their loyalty now and the outsider brands won’t have a chance.
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