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Digital Lending – Insights and Learnings From Interviewing Indian Millennials

We had to build a virtual credit card in the digital lending space targeted at the older/working ‘Millennials’- the single, most valuable cohort that brands around the world are trying to collectively court.

Generation X or ‘millennials’, as they are popularly referred to, are slowly emerging as the highest spenders across a variety of consumer products. Taking over the reins of the world from the frailing baby boomers, the millennials are poised to constitute 75% of the workforce by 2025. But designing an online lending product specifically for them is not short of unique challenges to say the least. Many marketers complain that millennials spend money differently; infact, many expenditure insights place them at striking odds with those of their parents. They have famously been held responsible for killing everything from the auto industry to the doorbell industry

Moreover, millennials carry a deep disdain for large banks and look at financial services as an industry with utter mistrust due to the mountain of debt that they are servicing. As the current largest customer base for online lending platforms in India, more than half of the generation is paying off personal loans of many denominations, while about 25% of millennials have at least one credit card.

Hence, to find the missing pieces of the puzzle, we took it upon ourselves to understand the ‘misunderstood’ millennials and their spending habits. 

Who are the ‘Millennials’?


Say the word ‘millennial’ and the mind conjures up an image of a selfie-taking- gelato-eating snooty, misguided teenager. However, millennials are not children. This demographic cohort represents anyone born in the years between 1981-1996. So the oldest millennial is all set to hit 40 next year. Millennials are entering the peak earning years of their life and are responsible for 50% of the purchase decisions made every year. Indian Millennials, especially right now, can afford to buy their first homes, they just choose not to.

So, how did this learning affect our virtual credit card app? Our user group had buying and spending power to purchase all their hearts desired. But what did their hearts desire? Where was it all going?

Research Methodology

During the user research phase for our product, we framed our questions to unravel insights on their buying preferences other than the obvious questions on credit card usage.

We wanted to gauge:

  • Pattern of expenditure on online shopping versus offline shopping
  • Shopping habits ranging from window shopping, casual app browsing, actual buying and delivery of products. 
  • Importance of deals and discounts in user conversion, etc.

To gather these shopping insights, we asked the following questions:

  1. What was your single biggest expenditure last year?
  2. Were your purchases in the last week more online or offline?
  3. How do you normally transact: via cash or card? 
  4.  How did you pay for a certain major expense? Did you buy it upfront or did you convert it into an EMI on your credit card? 
  5. How often do you dine out? How many times do you order food online? What’s the average order value?
  6. How many discretionary retail expenses do you make every month?
  7. How often do you buy gadgets in a year?
  8. What are the major life expenses that you anticipate in the next 5 years?
  9. How much debt do you have?
  10. How much money do you save every month?

The purpose of this inquiry was to understand the millennial mindset and the challenges they face while dealing with the online lending system in India. Most millennials had come in contact with at least a dozen online money lending apps and virtual credit card apps, but were sceptical of new incumbents in the fintech industry. 

Insights and Learnings from interviewing Indian Millennials:

Millennials like to spend on experiences, not assets.

Millennials like to live in the moment. There is an increasing trend in photos of travel, fine dining, shopping sprees and other such lifestyle expenses surfacing on social media which is an important indicator of millennial buying behaviour. Retail purchase reports from 2015 onwards have shown a sharp increase in what older generations might consider “frivolous expenses.” While post-Millennials saved up to buy houses or cars, millennials seem to be all about instant gratification. Asset creation is not the mainstay of the millennial financial plan.

The interview answers revealed that the biggest expenditure most millennials save up for is an international vacation. But, paying for these extravagant lifestyle expenses doesn’t always come easy. Saving up for a fancy vacation takes work and meticulous planning. Many millennials put in a lot of time and discipline for what might seem like a short term reward. 

While we were designing the online lending app, we amplified the key product offering in the brand’s key messaging. So, if you were a 30-something wishing to go to Spain for 2 weeks, how would you do it? You would get a credit card that gave you 10 or 20 times the reward points on things you were most likely to spend on frequently which could be encashed to buy tickets thus eliminating the cost of travel, at least partially. Add to that discounts on maybe Uber or Airbnb and throw in free international lounge visits. Voilà! You have a card that lets you travel the world on a tight budget.

Millennials are discount driven.


Brand loyalty is a thing of the past. Millennials scope the entire shopping arena, both online and offline, in the hopes of finding discounts and package deals. They are firm on the discretionary expenses that they intend to make whether it’s watching a movie, eating out or planning travel. Millennials prepone or postpone these expenses on the basis of the ‘deals’ or ‘rewards’ they get in this exercise. 

This is where Millennial credit card holders play it smart. They use their credit cards to receive maximum reward points, while at the same time, save up through different discounts provided to them for that particular purchase. We weaved this insight into our product’s messaging. The reward categories for this credit card were laid out along the lines of “Travel”, “Dining”, “Entertainment” etc. The card can be tailored to suit the individual’s unique spending preferences. This shows our audience the range and flexibility presented by the virtual credit card. The brand messaging was very clear-“you can choose this card for any lifestyle.”

Millennials love ethical and sustainable brands

Regardless of how you twist it, banks aren’t held in the highest of regards by Millennials. As first account witnesses of the 2008 global economic meltdown, they saw their livelihoods and their place in this world take a big hit early on in their careers. Hence, a certain degree of scepticism and suspicion is underlined in every interaction with banks and financial institutions.

In addition, millennials are the digital natives of the human race. They are highly tech savvy and connected to the rest of the world every second of their lives. Millennials stay updated with new technologies and trends and will research a brand and their services extensively online before committing to become a patron. If a financial institution has a history of wrongdoing, millennials are likely to take their business elsewhere. However,  millennials don’t necessarily think of big corporations as evil; if a multinational corporation, such as a bank, holds a reputation of dealing with their customers in an ethical way, millennials have no problem associating with it. The notion of making the world a better place is important to this demographic.

With respect to our online lending app, we implemented innovative strategies to communicate our bank client’s ethical policies and noble causes to our interviewees to an overwhelmingly positive response. Taking this into account, we set out to build the messaging for this credit card. The bank’s policy of a “45-day free return” policy was added to digital communication and reiterated through the credit card’s product page. To add a community service angle, we also added the option to donate to women’s education when they pay their monthly bill. The same was communicated to the prospective clientele through active online marketing campaigns.


Millenials are poised to inherit the world. Every new generation brings about a fair bit of creative destruction in the world and the digital natives are no different. Interviewing an audience who have been notorious for their left of centre spending habits has opened up many avenues for innovation. Online money lending apps and smart online payment technologies have already captured a significant portion of the Indian diaspora. In order to appeal to the discerning millennials, virtual credit card apps will have to accommodate their unique preferences and spending habits. Young people today have more smarts and buying power than we would like to give them credit for. The key is to look outside of the obvious areas and industries usually associated with big spending. Also, as product designers, we should explore social media channels such as Instagram to give us an instant insight into the trends that are moving the world. Overall, as always, trust in your data and ask the right questions. Basic user research will never lead you astray.

Published by Venky Hariharan

Lead UX Designer

Venky Hariharan Lead UX Designer