The financial services industry is a nearly perfect case study. Its product is pure, digitizable data, unless you figure the industry is also selling personal counseling and relationships. But those may not mean as much to Millennials as to older generations. The industry is dominated by big, old incumbent firms, exactly the kind that get blindsided by unheard-of upstarts with new business models. The market opportunity includes practically everyone in developed economies and billions more in emerging economies. And members of the largest generation are hungering for a better way to manage money just as they’re starting to accumulate some.

This generation that’s filled with promise is starkly different from the Boomer customers whom financial services firms understand best. Millennials were traumatized by the financial crisis and also by the dot-com bust if they remember it. Many of them trust no one on money matters. They may actually prefer a robo-adviser to a human adviser. They see no reason to be loyal. They demand total transparency on fees; many are still furious about the whopping fees they incurred on their first debit cards, issued by the same firms that now want to handle their finances. They must be able to do everything from their phones.

The incumbent firms know they face a giant challenge. BlackRock, the world’s largest asset manager, recently bought FutureAdvisor, an online investment firm that uses algorithms to advise clients. It was started by Bo Lu, 32, after a traditional adviser declined to take him as a client. The other dominant firms, including Vanguard, Fidelity, and Charles Schwab, have all developed new-model digital offerings.

Will Millennials embrace them? Or will they prefer new competitors like the robo-advising brokerage Betterment? It manages $3 billion for 120,000 clients, two-thirds of whom are Millennials. Founder Jon Stein, 36, says, “We have lower costs, we give better advice, we have a better user experience. Why would you go to Walmart to buy something if you can buy it cheaper and faster with Amazon’s instant delivery?” Or maybe they’ll like RobinHood, launched in 2013 by former Stanford roommates Vladimir Tenev and Baiju Bhatt. As our article says, “customers can download the app and register a new account in about five minutes, and easy-to-read buttons and menus make trading relatively frictionless…. In two years, customers have made trades worth more than $2 billion via their app. The average age of a Robinhood customer is 28, and a quarter of them come in as first-time traders, says Tenev (who is himself 28).”

The leading incumbent firms in financial services are so massive that they seem truly invulnerable. But then that’s what they all say. This is an industry for everyone to watch.

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