Millennials unwilling to share data with banks/fintech startups
Today LexisNexis Risk Solutions releases its comprehensive Millennial Study: Privacy vs. Customer Experience report, which charts the digital consumer preferences and behaviors of Millennials in seven global markets—the U.S., U.K., Germany, Hong Kong, Malaysia, Mexico and Brazil.
The study upends some previously held assumptions about Millennials, including its finding that, despite their digital connectivity, Millennials are extremely guarded about sharing their personal information. A chasm exists between Millennials’ desire for secure access on all connected devices and their discomfort and unwillingness with sharing data—a wake-up call that businesses need to find ways and solutions that minimize the amount of data they collect.
Kimberly Little Sutherland, senior director, Fraud Management, LexisNexis Risk Solutions, comments: “The general discomfort Millennials are expressing with information sharing, beyond a couple of the most basic data points, shines a light on the need to educate this major and growing portion of the consumer population. Likewise, it begs the question of retailers and financial institutions, Are your business processes optimized for the Millennial customer?”
Across global markets, Millennials exhibited similar tendencies in their use of payment methods and digital equipment as well as their attitudes toward information and security measures—indeed, they seem to have the same basic needs as other demographic segments—but they are more vocal about what they want and expect. The study identified U.S. Millennials as foremost among the “power users”—those who not only have and use many digital devices, but use them for a large variety of purposes. Friction intolerance over the sharing of personal information is another area of commonality across markets, though to a retailer or financial institution, Malaysian, Mexican and Brazilian Millennials will pose the biggest challenge here, as they are more sensitive than others. Malaysian Millennials exhibit the most concern about identity theft.
Sutherland notes, “To mitigate risk and balance consumer expectations, companies looking to enhance the customer experience and improve friction will need to ask only for the data they need. Currently many companies are asking for information required by their existing technology systems, but that is not actually needed in their workflow—for example, some companies in the U.S. ask for social security numbers when their businesses don’t actually require this information.”
She adds, “Many companies are working with systems that have redundancies and backup plans built in, when in reality they should have stronger primary identity verification. Stronger primary identity verification would ensure that companies don’t have to rely on more intrusive secondary verification processes that ask for supplemental, and in some cases unnecessary, data. This approach would reduce customer friction and improve the customer experience.”
Among U.S. Millennials surveyed, the study found that they are more likely to use debit cards than their global counterparts, and that their tolerance for “friction,” for example having to share personal information to open a bank account, ranks them among the most impatient in the world, along with their German counterparts. Smartphone use is almost ubiquitous (97 percent) across all markets, and in the U.S. they are used for mobile banking though not, in the main, for making purchases. Two-thirds of U.S. Millennials are worried about identity theft and data breaches—surprisingly lower than most of their global counterparts, of whom more than 75 percent are concerned.
The Millennial study notes that distrust of retailers, communications companies and payment providers is sizeable, varying by country—but more than a quarter of Millennials globally have “no trust” that retailers or mobile wallet companies will handle their personal information correctly or securely; financial institutions fared somewhat better, with a 13 percent “no trust” rating.
Thomas C. Brown, senior vice president, U.S. Commercial Markets and Global Market Development, LexisNexis Risk Solutions, says: “The study findings show a significant disconnect between the concerns of Millennials and the information businesses need to ensure financial transparency. Consumers want to know that they’re protected from potential identity fraud, which banks and other companies can only provide if they have access to enough, and the right kind, of data to detect financial crime and bad actors within the system.”