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TransUnion report insights: Decoding millennial financial health

This week’s guest blog post is contributed by Jeff Minich, VP of Product Partnerships at TransUnion Digital.

TransUnion recently released a new research report, Generation Revealed: Decoding Millennial Financial Health, which dives deep into the financial behaviors and trends of millennials.

As millennials mature and become the dominant demographic in terms of purchasing power, understanding how they interact with credit is a new imperative for developing effective marketing programs for financial services advertisers.

Here are key insights from our report to help marketers better understand and target this coveted age group.

Highlights from the report

There are 67MM millennials in America, representing 25 percent of the country's purchasing power. This largest American consumer cohort came of age in the digital era, with information available anytime and anywhere.

But millennials also matured against the backdrop of the Great Recession and its economic uncertainty. These two cultural forces shaped how these consumers move through the world. 

The Generation Revealed: Decoding Millennial Financial Health report, found that millennials' credit participation differs significantly from prior generations:

  1. Millennials lag in credit participation and differ greatly from Gen X in their use of credit cards
  1. Millennials open fewer credit card and mortgage accounts, but open more auto and personal loans than Gen X

Millennials don’t use credit as much as Gen X across various products, but this is particularly evident in the card sector where millennial usage is 20 percent lower than that of Gen X. While gaps are smaller for mortgage and auto loans, we see nearly identical participation rates for personal loans.



With the rise of the sharing economy, the popular belief is that millennials prefer to rent than own a home, or use ridesharing or public transportation instead of buying a car. The myth of access versus ownership continues today.

However, while millennials may delay home purchasing by a few years, 74 percent of millennials who don’t have a mortgage plan to purchase homes at some point.1 Following the housing crisis, more stringent lending standards for mortgages caused a shift toward prime and above mortgage lending, putting a home purchase out of reach for many millennials.

Even more than homeownership, the myth that millennials don’t want to own a car is simply false. More than 80 percent of millennials report owning or leasing a car.1 Unlike mortgage lending, millennials can access credit to purchase or lease vehicles.

The risk distribution for auto loan and lease originations has not changed dramatically between 2000 and 2016, providing millennials an opportunity to finance cars in the same way as Gen X. Looking at the two major purchases most consumers make—homes and vehicles—millennials have not abandoned ownership.

In fact, the necessity of owning a car as a primary mode of transportation and the desire to own a home are alive and well for millennials.

Audience recommendations

Knowing millennials’ credit participation differs from prior generations, it’s important to use new strategies to acquire and engage them as customers and build loyalty for the long term. Here are some considerations when targeting millennials with digital advertising.

Plan for delayed life-stage events

  • Adjust targeting strategies for millennials, particularly for mortgage lending, to recognize delayed purchase behavior.
  • TransUnion’s “Young Consumers In-Market for Mortgage” audience can help advertisers target millennials more likely to be in-market for a mortgage in the next three months.

Focus on personal and auto loan products for millennial customer acquisition

  • Millennial participation rates for loan products are highest for personal and auto loans. As a result, when targeting customer acquisition campaigns to this demographic group, lenders should consider utilizing offers focusing on these loan categories.
  • TransUnion’s “Personal Loan In Market Propensity” and “Auto Loan In Market Propensity,” combined with age targeting, can help advertiser’s aim their digital campaigns to millennials more likely to be in-market for these loan categories in the next three months.
  • As millennial consumers’ credit needs change and grow over time, opportunities to cross-sell personal and auto loan customers with card and mortgage products can help drive increased portfolio growth and long-term brand loyalty.

To learn more about trends in millennial financial behavior, download TransUnion’s Generation Revealed: Decoding Millennial Financial Health report.

Reach out to Oracle Data Cloud’s experts at The Data Hotline today with any data marketing campaign questions about these audiences. (What's The Data Hotline?)

About Jeff Minich

Jeff is VP of product partnerships at TransUnion Digital, a financial services data provider in the Oracle Data Cloud.

Prior to TransUnion, Jeff held product management and marketing roles at Adobe, Yahoo, Optimine and AdRoll. Jeff has an M.S. in Predictive Analytics from Northwestern University.

Stay up to date with all the latest in data-driven news by following @OracleDataCloud on 
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Image: Shutterstock  

 

1 Transunion Millennial Survey, 2017

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