Online banking excludes some over-65s

Digital banking may be convenient if you’ve grown up with it, but around a third (31%) of over-65s in the UK feel uncomfortable using online banking, a trend with significant implications for marketing.

The finding is taken from an Age UK study, reported by the Financial Times, exploring the risks of financial exclusion among 1147 UK respondents 65 and older.

Why it matters

The converse, of course, is that two-thirds of over-65s are comfortable with digital banking, yet for an innovation that is supposed to be more profitable than high-street banking it’s still troublesome if a significant minority of the country’s wealthiest demographic is spooked.

With app install fraud not uncommon, especially in finance, financial services brands will need to continue improving their perception of competence among older consumers. Brands could take a leaf out of the book of Asian FinServs which establish deep, often digital relationships with their older customers using a personal touch.

What’s going on

The Age UK study also finds that distrust in online banking rises with age: three-quarters of the youngest cohort (65-69) are comfortable with it.

The study is part of a campaign to accelerate the roll-out of proposed “shared banking hubs” run in collaboration with local Post Offices. These are meant to provide access to in-person banking services in otherwise unbanked areas. While 38 are planned, just four have opened so far.

What about the majority?

As ever, digital enthusiasm among the public varies depending on who you ask.

• In the US, for instance, Chase’s Digital Banking Attitudes Study of an undeclared sample size found that 84% of Baby Boomers (roughly 57-75) prefer to manage their banking in one place, namely a mobile app.
• Meanwhile, a YouGov survey of 2087 UK adults on behalf of MagiClick, a tech design agency, found that 52% of over-55s use mobile banking. This same age group also ranks the ‘ease of digital services’ as the most important factor when choosing a bank.
• Generally, Asia can be a good guide for the next phase of digital services, especially in the context of its rapidly aging population. McKinsey highlights examples of value-added services designed for senior customers, especially for insurance firms that are entirely based on a highly personalised service.

These digital developments are not just about being nice; the aging population’s consumption is growing faster than the general population. Around the world, the older generation is living longer, and building products and services that engender trust and are useful is becoming as much a commercial priority as a moral one.

Sourced from the FT, Age UK, McKinsey, Chase, UK Finance