Financial institutions without digitally friendly products and services are missing out on the opportunity to inspire confidence in those 50 and over who hold 83% of U.S. household wealth. It’s essential that they feel confident with digital banking tools and services.
Today's older adults are embracing technology ever more in a pandemic and post-pandemic world. A study by the Financial Health Network found that 81% of customers 60 to 69 own a smartphone, as do 62% of customers older than 70. Plus 94% of those who own a smartphone use their device daily.
Yet, without appropriate digital financial literacy resources, many people shy away from digital banking services. They fear fraud or scams. They aren’t wrong to do so either. In 2021 the Federal Bureau of Investigation (FBI) reported 92,371 older victims of fraud, resulting in $1.7 billion in losses.
Even though digital banking among older adults is rising, there remain lingering fears about online security. According to a survey by LightiCo, 10% of older banking customers don’t feel online transactions are secure (even larger proportions see them as merely “somewhat secure”). Their top concerns regarding online security are fear of financial loss (52%) and the loss of privacy (42%). The impact of monetary losses through fraud or identity theft can be devastating for people on a fixed income.
Measures to increase older banking customers’ confidence in digital banking
As banking becomes more digital with payment methods shifting from checks and card swipes to Zelle or Venmo transfers and tap-to-pay card reading devices, it will be essential for older adults to keep up with digital payment methods to continue to thrive in an ever-digitalizing payments economy.
Even those who are digitally banking skittish after encounters with fraud can be taught to see its value and utilize it. Sheela from Georgia, like many older banking customers, initially wasn’t keen on online banking even though her husband used it. She had previously been the victim of online fraud. But once she learned how to effectively note scams and frauds and participant in online banking, she gained confidence. Now she even has more time since she does not have to go to her local bank branch.
Now it's not just older banking customers who are taking note of the importance of digital financial literacy, leading banking institutions are as well. India’s leading Asset Manager, ICICI Prudential Asset Management Company Ltd partnered with GetSetUp to offer classes about financial tools for saving and investment to older adults on GetSetUp’s platform. The financial institution will offer classes on topics ranging from basic economic financial principles, investments for retired life, types of mutual funds, and how various funds and other investments work, among others.
Globally there is a push for digital financial services. Non-digital payment methods like chess are slowly becoming obsolete. It’s time that financial institutions focus on their digital products and services. They should ensure that all consumers have the know-how to navigate their tools seamlessly and with confidence.
According to Tech Spotlight Data findings in October 2022, more and more older adults are consuming content online, especially on their smartphones. Educating consumers through digital content is a simple and effective way to activate new digital banking users. The financial institutions most likely to take the lead are those that create seamless UX designs, simple-to-use products, and offer educational tutorials that meet the needs of diverse consumers instead of banking on the user to figure it out for themselves.