Several years after the 2008-2009 global financial crisis, banks still have a long road ahead to earn the trust of many citizens, especially younger ones. This is especially true here in the U.S., where the evidence suggests millennials are continuing to leave the big banks and trust their money with smaller community banks.
Of course, many Americans do not bother to use banking services at all: The Center for American Progress estimates that 4 out of 10 citizens younger than 35 are either unbanked or “underbanked.” A recent Brookings Institute report suggests 3 million Americans between the ages of 16 and 24 are “disconnected,” as in they are neither enrolled in school nor gainfully employed.
These numbers pose long-term challenges for the U.S. economy — and for the banking industry, as well. To that end, one bank plans to invest millions in youth employment in an attempt to staunch these trends.
On Tuesday, Bank of America pledged $40 million to support youth-development initiatives like summer internships, skills trainings and leadership programs. The three-year investment will bring funds to nonprofit partners like Boys & Girls Clubs of America, Jobs for the Future and Urban Alliance.
With the goal to reach at least 100,000 young Americans, this “investing in young adults” program will build upon the bank’s existing youth initiatives, which include a summer student leaders program and internship rotations for young professionals.
The North Carolina-based financial giant says the long-term goal of these projects is to develop a pipeline of young professionals and a more diverse workforce. (Left unsaid was the potential to groom future customers.)
Other banks are also taking the hint that young Americans’ disengagement from the financial sector brings not just long-term challenges, but also an opportunity to prove banks are committed to community and economic development. For example, JPMorgan Chase announced a five-year, $75 million program to take on the global challenge of youth unemployment. A $100 million series of investments in the Detroit area also offers opportunities for young entrepreneurs to turn their ideas into profitable businesses.
Financial institutions have a vested interest in proving that they are here to help make the American economy work and offer opportunity, and not just profit shamelessly and leave taxpayers cleaning up their mess, a belief that films such as "The Big Short" have helped to perpetuate. Gaining the trust of the 77 million millennials in the U.S., after all, means big business in the long run, as the paycheck-to-paycheck earners of today will eventually need the banks’ far more lucrative retirement and mortgages of tomorrow.
Image credit: Pete Kraynak/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He is also the Director of Social Media and Engagement for 3BL Media. His previous work can be found at The Guardian, Sustainable Brands and CleanTechnica. Kaye is based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.