2016 was the year an unprecedented shift happened in Canada’s demographic make-up: for the first time in recorded history seniors outnumbered people under 14 – and the US is likely to follow suit in the next 5 years. By 2050 seniors will make up between 21 and 27.9 percent of the population in Canada and the US, according to the US Census Bureau.
As boomers move into retirement their financial needs will change. Banks offer numerous retirement savings plans – however, once retirement kicks in banks offer almost no senior-specific products and services, other than perhaps a discount on a checking account. This is problematic because the number of seniors is about to explode, and as a cohort boomers are consumer-savvy and expect good service.
Retirement is ideally a golden era during which the fruits of your hard-earned labors pay off in leisurely afternoons golfing, visiting family, travelling and indulging in hobbies that have been on the back burner for many years. Unfortunately, it also comes with a number of obstacles, such as mobility issues, memory loss, and a decline in visual ability, cognition and dexterity. Banks have done a good job addressing basic mobility needs. However, with the focus on customer experiences that appeal to millennials and the push towards digital transactions, banks have overlooked the needs of the aging population. Here we look at areas of opportunity for banks to explore as the demographic make-up in North America begins to skew over 65.
What seniors want from their banks
Retirees at long last have the luxury of being able to take their time. Some of them are restless, others are invigorated, and others are socially isolated. Regardless, they have more time to spare than other customers and appreciate not being rushed. They are also at a stage of life where they know the value of strong personal relationships and expect transparency from financial advisors. Boomers are better educated than previous elderly consumer groups, and many are very financially literate. They will despise being talked down to, and will go home and research before making any big decisions. Here are three ways banks can ensure they don’t lose seniors to other institutions in their golden years:
Building a long-term relationship
Seniors’ preference will be to have a designated contact person at the branch. They will find it very irritating to have to explain themselves over and over again to a stream of different people, and some will find it upsetting to lose a trusted advisor. The benefit to banks is that a long-term relationship builds trust, and will ensure loyalty and advocacy. Additionally, having an ongoing relationship with staff at the branch will help guard seniors against financial abuse – a huge problem costing seniors between 2.5 and 3 billion dollars a year. Staff need senior-specific training to spot scams, and guidance about how to navigate the tricky legal and ethical grey area that may happen when a senior’s ability to make sound financial decisions starts to decline.
Seniors’ financial management package
Banks should consider offering a lower-cost financial management package option for seniors who cannot afford a full-service advisor. Many seniors might prefer to start off on a lower-cost part-service model and move to a financial advisor when they feel they need more support. A program might consist of group learning sessions, monthly one-on-one meetings, fraud alerts, assistance in setting up automated bill payments and deposits, and be based on a monthly fee with the option for added value services, such as estate and will planning.
Digital experience for the elderly
Some seniors will hit you up with a LinkedIn or Facebook request before your meeting is over, while others use their phone for nothing other than (gasp) making phone calls. Across the aging demographic, there is a huge range of ability and willingness to adopt digital banking. Many assume a lack of interest or mistrust in electronic banking is the primary reason for lack of adoption by seniors, but this may not be the case. Designers have been so focused on creating apps and web interfaces for millennials that they have ignored seniors altogether in their design.
Why should an app take seniors into account? While today your grandmother may be sharing a shot of her post-yoga smoothie on Instagram, as she ages deteriorating eyesight and dexterity will make using apps. Here are some tips for getting digital banking for seniors right:
Seniors also want customization
Banks must make sure they are optimizing apps to allow customization through a smartphone or mobile device’s operating system. To address this, visual impairment font sizes must be large (14 point is preferred) and type should be non-glaring with consistent stroke weight. All caps, decorative script fonts and very thin or thick fonts are not optimal for readability. Additionally, the contrast must be sharp – 70 percent is recommended – so no slate font on pale grey backgrounds. Buttons need to be large enough for shaky hands to tap, and helpful communication features such as a “click-to-call” buttons will allow less experienced seniors to feel confident learning. Make sure to test apps on seniors as well as other demographics. The rest of us have no idea what it is like to be over 65. Let them tell you what they like and what isn’t working. Additionally, do not make frequent updates to the interfaces – the constant relearning required will aggravate seniors.
Banks report lower digital engagement from seniors, even though they are able to bank from the comfort of your own living room might make logical sense for the elderly. But have banks really communicated to seniors that mobile banking is something not only millennials can easily learn? Barclays Digital Eagles collaborated with Friends of the Elderly to help seniors in the UK improve their digital skills, using content like this video. It is relatable and brings the internet down to earth for those who may be intimidated. Banks should offer learning sessions for seniors, and ensure the content speaks directly to that group. And banks should not forget that many boomers are digitally savvy, but that as they age they may find it difficult to ask for help – communication needs to tell seniors they are not alone and that banks can help.
As boomers move into retirement, banks will need to adjust their customer experience to take this enormous demographic’s needs into consideration. Better products, exceptional service and communication are what boomers expect from banks, and banks will need to step up their game before the competition beats them to it.