ABA Banking Journal - May/June 2016 - (Page 8)
> PRESIDENT'S VIEW
Preparing for Seismic
BY ROB NICHOLS
ONCE UPON A TIME, baby boomers were the topic of countless surveys and reports, as
those wishing to woo or sell their wares to the largest generation craved data on boomers'
wants, needs and behaviors. Not surprisingly, those cravings have given way to a new but
similarly insatiable desire for information on boomers' offspring-the millennials-who last
year overtook boomers in numbers to become the largest American generation ever.
With immigration, the ranks of
millennials will continue to expand
for the next two decades and their
dominance will continue to coincide
with rapid technological changes
that are reshaping the way banks
and other industries do business.
Add in the expected transfer of some
$30 trillion in wealth from boomers
to millennials over the next few
decades, and it's clear that concerns
about understanding and appealing
to this influential generation are
very well placed. Millennials are-
literally-our industry's future.
ABA is keenly aware of this and is
organizing around it. It is as much
a part of our strategic planning and
advocacy strategy as it is a part of our
professional development offerings,
the ABA Foundation's financial literacy
programs and the pages of this
magazine. We want to ensure not only
that today's CEOs have the information
they need to satisfy the expectations
of future banking customers, but
also that banking is viewed by
tomorrow's talent as a promising and
satisfying place to build a career.
While some surveys dish up
depressing findings-like the one
that said millennials would rather
visit the dentist than listen to what
banks have to say-the reality
ABA BANKING JOURNAL | MAY/JUNE 2016
is that banks have tremendous
opportunity to appeal to millennials
and showcase their expertise.
A recent study by PwC and the
Global Financial Literacy Excellence
Center on young adults' financial
capability found that U.S. millennials
are lacking in their understanding
of financial concepts, with only
24 percent demonstrating basic
financial knowledge. Thirty-four
percent reported that they were
"very unsatisfied" with their current
financial situation, and 50 percent
said they lacked the ability to cope
with even a moderate financial shock.
The study also found that debt
obligations, particularly from student
loans, are a main point of concern.
Two-thirds said they carry at least
one source of outstanding long-term
debt, and 54 percent are concerned
FUTURE. ABA is
keenly aware of this and
is organizing around it.
about their ability to repay. More
than half reported carrying over a
credit card balance in the last 12
months, and many reported turning
to alternative financial services, such
as payday lenders or pawnshops.
They should be turning to banks.
That's where they can find help
with managing debt and building
savings. That's where they can find
both "fintech" innovations and the
commitment to security that comes
with doing business with an FDICinsured and regulated institution.
And it is where they can find help as
they exercise fiduciary care of their
aging boomer parents. In fact, ABA's
new Safe Banking for Seniors program
is aimed at just that. It provides
presentations and materials bank
employees can use to spread the
word about spotting and preventing
fraud against older Americans. It is
a problem that will only grow as the
share of the U.S. population 60 years
and over-currently projected to
reach 30 percent by 2025-grows.
These are seismic demographic
shifts with enormous implications
for banks. Count on ABA to help you
prepare and plan for them.
ROB NICHOLS is president and CEO of ABA.
Table of Contents for the Digital Edition of ABA Banking Journal - May/June 2016
BANKS & USDA
COVER STORY A SPECIAL REPORT: BANKING ON MILLENNIALS?
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ABA Banking Journal - May/June 2016
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