Millennials are different. At least, thats what weve been told, which is why we spend so much time studying and strategizing how to acquire them. Their habits will shape the future of banking. Soon theyll be the biggest generation in the workforce, soon theyll start buying houses and savings for their kids college education, and soon theyll receive billions of dollars in inheritances from their parents.

But for now, many Millennials are unprofitable ? at least to retail banking providers.

Almost a quarter say they carry less than $5 in cash seven days a week. A majority report they are living paycheck to paycheck. About 40% report that they are overwhelmed by debt obligations, primarily from credit cards and student loans.

Despite the gloomy statistics, banks and credit unions seem to collectively agree that pursuing Millennials is the right strategy, despite their immediate unprofitability. The hope is that they hold onto these Millennial relationships for ten years or so until they plump up their checking balances, take out mortgages and open up business accounts.

Only theres a fly in that ointment: Millennials dont show much loyalty.

A survey from FICO shows that Millennials are five times more likely than those over age 50 to close all accounts with their primary bank, and three times more likely to open a new account with another bank. The

The likelihood of any particular financial institution holding onto a Millennial for 10 or 20 years while waiting for their eventual profitability seems remote.

The Millennial strategy seems to work for the big four megabanks ? Bank of America, Chase, Citi and Wells Fargo ? because Millennials are generating revenue for them from the outset. When IT expenses for a major bank are spread across 40 million customers, the monthly cost of maintaining one mobile banking customer is just a few cents. Add in the higher service fees that national banks charge, and the strategy adds up. Millennials can bail out from big banks at anytime and it wouldnt sting too badly. Besides, a significant percentage of affluent Millennials will remain with them, which helps soften the blow of any defections.

But what works for the big banks isnt really viable for smaller banks and credit unions in the U.S. ? those with assets under $2 billion dollars or so. For these more modest-sized community institutions, the typical fee for maintaining a Millennial checking account is more like $2 to $3 a month ? an amount that would keep low-balance accounts underwater for many years.

This is why marketing to Millennials is like playing musical chairs. The music starts in college when they open their first account, and each time it stops Millennials land on a different bank and switch relationships. When the gig is up, its the last bank that will be enjoying those long-term benefits.

The musical chairs analogy also reflects the wave of consolidation sweeping across the banking industry. After each stop in the music, a chair is removed; thats analogous to the shrinking universe of banking providers. As the game of musical chairs with Millennials continues, consumers have fewer and fewer small bank options.

Jumping from bank to bank is not just a function of being a Millennial, its more a function of being young, having little money, switching jobs and residences often. Its a life cycle that likely mirrors most generations. As careers and salaries grow, Millennials mature and put down roots. Their attraction to new technology is tempered by experience.

Until that time, the goal for community institutions must be to stay in the game, and position themselves as best they can to be the last chair for Millennials.

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