How Can Financial Services Brands Attract Millennial Customers?

Analyzing social data to understand how established investment platforms can keep up with startups

Forget what you heard about millennials choosing avocado toast over home ownership — the generation is growing up, and their wealth is growing too. It’s estimated that the millennial generation could be worth as much as $24 trillion by 2020. That means that financial institutions can’t ignore this important demographic, and they’re scrambling to find the best ways to win over these younger customers by embracing new technologies, minimizing risk and providing new forms of education.

But millennials are not just younger versions of older consumers — they have behaviors, preferences and needs that are completely unique from their older counterparts.

In this post, we’ll look at the social conversation about financial services and technologies to better understand the topics and technologies affecting millennials’ views on investing — and what established investment firms can do to appeal to this crucial demographic.

Luring younger investors with cryptocurrency buzz

The recent skyrocketing value of cryptocurrencies like Bitcoin, Ethereum, Ripple and more seems to have drawn the attention of plenty of millennials, many of whom haven’t invested before.

Here’s a look at the social conversation around Bitcoin and how it mirrors a rise in the curreny’s value.

TD Ameritrade chief market strategist JJ Kinahan recently told CNBC:

“People complain that we haven’t gotten millennials to trade. Maybe [cryptocurrency] isn’t the product I’d like people to start with, but this is the greatest opportunity we’ve had in the market to get people who weren’t traditionally interested in the market.”

Larger investment firms like E-Trade and TD Ameritrade paid attention and started providing options to trade in CBOE Bitcoin futures. But is that enough to lure young, first time investors?

The competition for first time millennial investors is stiff. There is a wealth of tech savvy financial startups vying for the same audience. For example, Robinhood, a investment startup that lets users trade from a simple app with no fees, has managed to grow a large user base and a value of $1.3 billion.   

Robinhood recently announced that it will start allowing users to trade cryptocurrency directly, similar to popular apps like Coinbase, but with no fee. This announcement has to send a shiver through traditional investment firms hoping to capture the interest of young investors.

Robinhood’s announcement about free cryptocurrency trading sent conversation volume soaring on January 25th. In addition to this buzz, the social conversation about Robinhood has been steadily positive throughout January.

Robinhood’s announcement about free cryptocurrency trading sent conversation volume soaring on January 25th. In addition to this buzz, the social conversation about Robinhood has been steadily positive throughout January.

Looking at the same metrics for E-Trade, we see steady but low conversation volume, and variable sentiment.

Conversation about TD Ameritrade spiked recently thanks to the CEO’s comments on investments in cryptocurrency and cannabis, yet still failed to reach the heights of Robinhood’s crypto announcement. Sentiment around TD Ameritrade is consistently positive.

Low-risk learning for first time investors

To examine Robinhood’s threat to the more established brands in personal investing, let’s turn to social media data. Beyond the buzz surrounding cryptocurrency, how does the Robinhood audience compare to other investment platforms?

Audience data for those discussing Robinhood shows that while 46% of the audience is 35 or older, another 46% falls between the ages of 18 and 34:

E-Trade, on the other hand, has 76% of its audience 35 and older:

TD Ameritrade’s audience skews even older, with 85% of it 35 and above:

Robinhood’s young audience makes sense. The startup’s no-fee model and easy-to-use app is the perfect way for new investors to dip a toe in the water of investing with little risk.

Additionally, Robinhood has recently focused it’s app and messaging to promote learning how to invest by doing it yourself and with curated articles containing advice and analysis. This tone of encouraging learning is also reflected in the social conversation:

For more analysis on FinTech and the rest of the financial industry, download this guide: Consumer Insights for the Financial Services Industry

 

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