By numbers alone, Millennials represent the opportunity of a lifetime for lenders. Per Pew Research, there are 75.4 million Millennials (those born between 1980 and 2000) in the U.S. They are the largest generation in the country and as such, they are expected to bring in 46% of all income by the year 2025.
As Millennials transition into adulthood, they show a growing interest in getting loans to buy a car, join the home owners club, travel or pay for higher education. In particular, data shows that the country’s largest generation is more interested than ever in buying cars, with their market share for new vehicles growing from 10.5% in 2011 to 11.2% in 2016. This trend is having a large impact on auto loans since, as with many other things, Millennials would rather go online to research and buy their loan. In fact, LendingTree has reported that 33% of all auto loans originated through their digital marketplace are requested by Millennials.
Meanwhile, tech savvy, and mobile-first – obsessed, even – Millennials began purchasing houses in large numbers during 2016, making up 61% of first-time buyers. In December, Mitek predicted that Millennials will originate more than $30 billion in mobile mortgage applications in this year alone. In short, Millennials are buying homes and they are spending big: 4 out of 6 plan to invest $500,000 or more in their next home (ValuedInsured dixit).
Speaking to the booming online lending opportunity, CUNA Mutual Group statistics show that the 550 credit unions using the company’s online lending platform receive $2.4 million in mobile loan requests per day. Moreover, providing a customized lending experience for mobile users appears to improve the online application completion rate by up to 10%.
Mobile capture for loan origination, key to unlock the Millennials’ lending opportunity
The rise of mobile banking is a steady one, with 78% of adults in the country owning a mobile phone and 43% of them regularly using their smartphone for finances management and mobile payments. As recently found out by the Federal Reserve in their last edition of ‘Consumers and Mobile Financial Services’, the majority of Millennials (67% in 2016 and counting) are using mobile banking more often and to achieve different goals, from checking their balances to repay their debts. This upward trend suggests that it will be just a matter of time until mobile affects even more of the financial services market.
In this regard, the last edition of our Annual Millennials Survey revealed that 85% of Millennials takes selfies every day and that there is an enormous unmet demand to use the mobile device’s camera for commerce and identity verification. For example, only 4% of U.S. Millennials currently use selfies to authorize purchases, but 46% would like to do so. Meanwhile, 39% of Millennials surveyed are really eager to use selfies to verify their identity. Furthermore, for the sake of saving time and hassle, 42% of the oldest Millennials would love to have the option of taking a picture of their driver’s license instead of filling out a form.
But don’t take our word for it. In its report Millennials: Your Mortgage Lending Present And Future, Accenture advises lenders wanting to win momentum with the largest group of borrowers in the U.S. to “offer mobile capture technologies to allow your borrowers to upload documentation to their loan file—from anywhere, anytime.”
Watch this video and discover how getting mobile lending right is easier than most people think. Mobile capture and identity verification technology can help transform digital lending. It not only enables the quoting, identity verification, document submission and payment process, but also allows younger loan applicants to use their much-loved smartphone to get a loan on the go.