Due to their sheer size, millennials show the greatest demand potential for loan products, with mortgages, auto loans, and credit cards among the top three loan products in demand.

Understanding millennials’ current borrowing needs and behaviors is essential for building long-term relationships with them.

Consider four insights when connecting with millennials:

1. For millennials, there’s no place like home. According to research from the National Association of Realtors, millennials represent the largest share of homebuyers at 37%, 65% of whom are first-time homebuyers.

Extraordinarily, 98% financed their home purchase from a lender. In addition to the sheer volume of home financing, millennials also required the greatest percentage of financing relative to the total purchase amount. Sixty-percent of millennials financed 90% or more of their entire home purchase.

This means while there is a tremendous amount of mortgage lending opportunity among this generation for lenders, credit unions wishing to appeal to these consumers will need to access available demographic and behavioral data and then use analytical tools to ensure they are hitting the right buyers at the right time (i.e., first-time homebuyers).

2. Millennials are throttling up auto lending. According to J.D. Power, millennials were responsible for 29% of all new vehicle sales. What’s the outlook for credit unions in automotive lending to this group? Good and maybe getting better: By 2020, millennials are forecasted to account for 40% of all new vehicle purchases.

These trends show that traditional financial institution lenders need to consider how they communicate options and processes to appeal to this vast market opportunity.

3. Millennials are leading the “cashless” movement. While consumers of all ages are increasingly embracing electronic payment methods, millennials are leading the way.

According to research from Capital One as reported by SWNS Digital, 34% of them “rarely” or “never” carry cash, compared with 25% of those over the age of 55.

While millennials tend to be debt-averse, many have embraced credit card use based on its convenience over cash and rewards programs targeted to their demographic: 45% applied for a rewards card in 2017.

To leverage opportunities to cross-sell credit cards and amplify line usage, it’s essential that credit unions carefully design card products with the right mixture of rate and fee characteristics, as well as rewards and perks specifically designed to entice them.

4. To unlock millennial lending opportunities, understand and embrace their complexities. Millennials are fast becoming the most educated generation in American history. One-third have earned at least a bachelor’s degree.

Education and income, as expected, are likely to play important roles in millennials’ financial decision making. An important consideration in marketing to millennials is life stage.

Millennials simply expect financial institutions to know what they need, when they need it, and the only way to meet that expectation is using a data-driven approach to needs analysis.

By understanding the experiences and life stages of this group, credit unions can tailor their programs to market to and serve this generation.

MARC MEOLI is senior sales engineer for Harland Clarke.