Editor’s note: Cristina Capobianco and Eugenia Zavradinos are associate directors, and Merle Sandler and Anne Pessala are senior consultants at management consulting firm, C Space, Boston. This is an edited version of a post that originally appeared here under the title, “For Millennials and their finances, today’s confidence is tomorrow’s fear.”

Forget FOMO. For Millennials’ long-term financial futures, it’s all about FOTU: Fear of the unknown.

But here’s the rub. When it comes to more short-term financial management – and spending in particular – Millennials feel confident and in control. They excel at responsibilities like living within their means, consolidating and paying off debt, automatically putting a portion of their paycheck into a savings account and opting for more affordable options when buying big ticket items like cars and homes.

So, why the erosion in financial confidence? A recent C Space study of 750 U.S.-based Millennials, predominantly female, points to the issue: a disconnect between Millennial consumers and the financial services industry. Nearly all Millennials (92 percent) in the study said that being educated on personal finances is important. Further, nearly three-quarters (73 percent) feel confident in their financial decision-making ability. But, this confidence does not match with actual financial literacy levels. Despite holding financial education in high regard and having confidence in making financial decisions, only 39 percent said they rely on financial advice from a professional.

For this generation, smart spending is the new saving and short-term relief is the new long-term planning. When they make financial decisions they feel confident about, they feel proud, happy, responsible, safe, accomplished, relaxed, strong and smart.

But many of these decisions involve interacting with financial institutions on a purely transactional basis – for example, making a credit card payment, a checking account deposit or transferring money. For the most part, these transactions are devoid of emotion. A lack of emotional connection leads to a lack of trust, and that has ramifications when considering a financial institution for long-term savings and planning.

Adding to this distrust is the feeling that financial institutions don’t really have their backs for the long-haul. This results in a further erosion in Millennials’ confidence about their financial futures. With an asset-first industry focus, current outreach and education by financial services companies are primarily dominated by messages of saving and investing. But Millennials have little support from these companies where they feel the least secure: future spending and debt.

Millennials have experienced a shift in values, with a differing view of the world compared to their Boomer parents. Things like job protection and security are no longer a guarantee. They are delaying marriage more than any generation before them. They are delaying buying homes and having children. Why buy a car when you can borrow one with Zipcar or get around with Lyft or Uber?

Simply put, the financial industry is not setting Millennials up for success. As one participant in our study shared, “I haven’t made this decision yet because I am not confident. I would like to refinance my home mortgage but I am unsure where to begin to shop around. I tried to do online research but it just got overwhelming and, to be honest, I simply gave up.”

Real opportunity

Financial institutions have a real opportunity here to connect with Millennials on their terms, to speak their language, provide support, build trust and empower their financial futures.

First, these institutions need to understand that, for Millennials, financial confidence does not mean knowing everything about personal finance. Rather, it’s about knowing what they need to know, when they need to know it. It’s about feeling confident in their ability to make decisions about their personal finances and their futures.

We know that Millennial consumers will talk to professionals who they have a connection to. They are confident about having money in the bank, paying the day-to-day bills, spending smartly and staying out of debt. But it’s the future they are overwhelmed about, and that’s when their confidence dips. Retirement isn’t even on their radar, and funding it isn’t in their realm of understanding.

How can financial services companies convert these customers to varsity-status finance? How can they build long-term relationships for the future? Figure out what’s in it for the customer, and deliver it on their terms?

Here are a few tips:

  • Gamify the process for instant gratification. Financial providers need to stop talking about things like waived fees, overdrafts and money transfers when most institutions already offer this at no cost. It’s table stakes. Instead, what about providing rewards on “treat yourself” items, like a $3 latte or a $2 dog treat? Celebrate the little luxuries.
  • Call it like it is. The financial nomenclature is all wrong. Why not name a product for what Millennials actually use it for? A checking account is a spending account. A savings account is used for bucketing money for future purchases like a vacation or new pair of shoes. Why not call it a rewards account?
  • Reposition retirement. Could retirement be positioned as the ultimate reward? Instead of talking about retirement savings, call it long-term budgeting to make far-off goals seem more concrete. You saved $500 – congratulations, you don’t have to eat cat food! Or, you set aside $2,000 – you just bought yourself a trip to Peru!
  • Define the enemy. Banks have never defined the enemy for consumers. For example, for laundry detergent, it’s messy kids. For deodorant, it’s sweat and stink. If banks define the enemy, they could position themselves as a resource for consumers to make smart decisions in a sea of financial traps and temptations.

Some financial companies are already taking steps toward a more Millennial-friendly relationship. For example, former Wall Street executive Sallie Krawcheck created Ellevest, a robo-advising platform for women, by women. Ellevest is personalized for each user’s financial situation and customized to meet their specific goals. The platform uses playful, yet respectful, tones and imagery that not only resonates with Millennials but contributes to increasing their long-term financial confidence.

There’s a real opportunity for financial institutions to innovate. Banks are sitting on a goldmine of customers but the industry needs to shift with Millennials to build trustworthy connections and positively influence long-term financial confidence.