Ann Thompson, a regional sales executive for Bank of America, knows that the surest route into the hearts and minds of millennials is through their hands — not hand-holding, but talking to them through technology. “They want to be self-served and want things convenient,” Thompson says. “So, we have to reach them through that thing they hold in their hands, a smartphone.”

The millennial generation certainly didn’t invent e-commerce or electronic banking. But as the first generation weaned on technology, it is far more a part of their everyday lives than it is for earlier generations who are adapting to new ways of conducting business. Steve Fleming, president and CEO of River City Bank, notes that many traditional methods of managing money, such as writing checks or conducting business in person at a bank branch, are in decline. “But the millennials aren’t as affected by those changes, because they weren’t used to them to begin with,” he says. 

A recent survey by Deloitte Consulting underscores that point, noting that 72 percent of millennials say that they check their cellphones within 15 minutes of waking up every morning.     

Electronic technology has evolved several generations since the first of the millennials were born. Digital technology was still in its infancy. The widespread use of the Internet as we know it now was still a full decade away. Cellphones were the size of bricks and high-end versions were hard-wired into luxury cars.

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Since the early ’80s, the millennial generation has grown to encompass 80 million people, a generation 40 percent larger than their typically baby-boomer parents. Due to their inherent tech-savviness, they have their own unique communication style. They are more likely to text than call, are more likely to research buying decisions online, and more likely to conduct financial transactions from the palms of their hands.

The world has seen many changes since millennials first came into it, too. Financially, the stock market has grown so robust that the year-end Dow Jones average of 783 in 1980 seems downright anemic today. But the optimism of this generation is tempered by a severe recession and near collapse of the global banking system. Those experiences have influenced the money habits of millennials just as the depression of the 1930s, world wars, or the economic growth of the post-war years shaped spending habits of their parents or grandparents.

“They absolutely were affected by what they went through in their formative years,” says Thompson, the parent of two millennials. “They saw something horrendous. Their parents and parents of their friends were touched by the global recession, either directly or indirectly. The millennials saw what could go wrong … and it produced a financial conservatism based on fear and tragedy.”

The majority of millennials are just now beginning to enter their greatest earning years. According to the U.S. Census Bureau, they will have more economic power than any previous generation, with direct spending estimated at $200 billion annually, generating an overall economic benefit of $500 billion. Some surveys estimate that power to be much greater.

But how they exercise that spending power seems different than previous generations, reflecting different goals and priorities.

In many respects, millennials go through the same struggles to get financially established as earlier generations did at the same age. And generalizations are just that — a one-size assessment can’t describe everyone. Some in this generation are happy to be baristas while others strive to be barristers. Even so, there are clues about what makes the millennials distinctive as they manage their finances and exercise that economic clout.

• They are more educated, with an estimated 63 percent being college-educated.
• They are wedded to technology and spend twice as much time a day on social media as older generations.
• They are more likely to live urban lifestyles, delaying the marriage and home-buying that earlier generations considered staples of suburban domesticity.
• They value the advice of their peers more than that of salespeople or financial advisors when shopping for banking services.
• They are more socially conscious and that influences where they invest finances.

Just as millennials were looking to put their education to use, many were stymied by a recession that has left many under- or unemployed. And that education came at a cost, racking up a $1.3 trillion debt, more than the two previous generations combined. The average millennial’s debt is about $27,000, and that restricts their spending options. “It makes sense to me that the millennials might be more conservative in their personal finances and more likely to make informed decisions, having had to deal with the recession so early in their lives,” Flemming says.

Julie Hassna, a millennial-aged financial advisor for Northwestern Mutual, sees that same conservative approach among her clients. “Social Security makes them nervous,” she says, even though they are many years from retirement. “We know it will be there for them, but they aren’t always so sure.”  

“The millennials saw what could go wrong … and it produced a financial conservatism based on fear and tragedy.”

Ann Thompson, regional sales executive, Bank of America

As a result, millennials who can afford it are “super-savers,” planning for long-term security far sooner than earlier generations and making their first nest-egg investments in their early twenties. Those who are sufficiently established in a job “are looking to protect themselves with some life insurance, contributions to their 401K plans and investments,” says Hassna.

But Hassna sees that financial conservatism balanced with a desire among millennials to value life experiences as much as the balance in a savings account. “Traveling and experience are important to many of my clients,” she says. “They are looking to protect themselves financially but also like to see if they can take a year off to travel to Europe.”

Thompson sees the same independence in her millennial clients. “They aren’t willing to be ‘house-poor’ like earlier generations were,” she says. “They are less trustful of organizations and want to keep their options open.”

The investments that millennials make are as much a social statement as a financial anchor. In the Deloitte survey, 75 percent of millennials say social responsibility drives their investment and buying decisions. That is reinforced by a Northwestern Mutual survey of investment models it defined as “socially conscious,” which doubled in value over the last decade to $6.6 trillion. In other words, millennials are more inclined to invest in causes or products they believe in.

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By making investment decisions based on their conscience and valuing the advice of their friends, social media plays a huge role in how they interact with the financial world. Surveys show that millennials are highly influenced by what their friends think. More than half of them are willing to share their opinions, even when their experiences are bad. There seem to be as many companies studying millennials as there are people in this age group, but here are a few more highlights: Nearly three-quarters of millennials in a 2012 survey by Aimia say they participate in loyalty programs; another by Mr. Youth shows that 43 percent of them have “liked” more than 20 companies or services on Facebook. More than half of millennials in a study by Wealth Management say they didn’t even need to go to the bank to meet with a financial advisor, preferring online video conferences to a conversation across a table.

Millennials also are more likely to bolt to a new bank if they aren’t satisfied with an institution. Accenture’s most recent consumer banking survey shows that 18 percent of this generation switched financial providers — double the average of other groups — when they were dissatisfied with high fees or less than generous rewards programs.

Earning the long-term loyalty of this generation is important to financial institutions. If the Accenture survey is any indication, that calls for banks to have more than an attractive website and smartphone app. Lower fees, transparent transactions and attractive interest rates — many of the products that all customers want — are especially critical in keeping the business of a generation that does comparison shopping every day. And on top of that, top banking executives say those products should be as convenient to use as requesting an Uber driver.

“They come to us fully informed,” says Thompson. “They don’t want to be sold products or services they don’t need.” As a banker, she says it’s important to listen to millennials and connect with them for everyday services. “If we do that when they are 25, they are likely to stay with us when they are ready to buy their first house at 30 or when they have their first $50,000 to invest.”