Pub. 13 2016 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 10 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 busi- ness. Add in the expected transfer of some $30 trillion in wealth from boomers to millennials over the next few de- cades, and it’s clear that concerns about understanding and appealing to this influential generation are very well places. 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 a part of our professional development offer- ings, 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 is that banks have tremendous opportunity to appeal to millennials and showcase their expertise. A recent study by PwC and the Global Financial Litera- cy Excellence Center on young adults’ financial capability found that U.S. millennials are lacking in their understand- ing of financial concepts, with only 24 percent demonstrat- ing basic financial knowledge. Thirty-four percent reported they were “very unsatisfied” with their current financial sit- uation, 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 log-term debt, and 54 percent are concerned 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 com- mitment to security that comes with doing business with an FDIC-insured and regulated institution. And it is where they can find help as they exercise fiducia- ry 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-cur- rently projected to reach 30 percent by 2025-grows. These are seismic demographic shifts with enormous im- plications for banks. Count on ABA to help you prepare and plan for them. Preparing for Seismic Demographic Shifts BY ROB NICHOLS, PRESIDENT AND CEO, AMERICAN BANKERS ASSOCIATION O nce 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. 