Getting older customers on board with digital banking has not been recognized as an opportunity by banks. This is a mistake, Agnieszka Walorska argues in her article in finews.first.
This article is published on finews.first, a forum for authors specialized in economic and financial topics.
Traditional banks and fintechs alike are rapidly expanding new, digital sales channels while shrinking their branch networks, but their digital product drive is aimed primarily at the younger customer groups.
Meanwhile, senior retail banking customers are likely to observe current developments with great suspicion. What's more, this particularly loyal customer group of over-65s is in danger of being left behind by the emerging banking trends. Their reservations and fears are strong, as are the behavior patterns acquired over the years.
«This opportunity, also known as AgeTech, has hardly been recognized by European banks so far»
Financial institutions must find ways to reach the ‘analog’ target groups and convince them to use digital banking for the long term. The task is complex because the difference between digital natives and those for whom the internet is an uncharted territory is enormous. This opportunity, also known as AgeTech, has hardly been recognized by European banks so far.
Banks must think again about the possibilities of AgeTech. Not only is the older target group far more loyal than younger generations, but it is also often better off financially.
The perceived high complexity of using online banking services often stands in the way of a successful entry into the digital banking world for older generations. Banks must therefore proactively combat these reservations and offer adapted services and products. Despite their skepticism, even older people have needs that can often be met digitally.
«Children are often the first point of contact for the older generation when it comes to digitalization»
The success of digital offerings for older users depends on many variables. The creation of an inclusive, visual world and the use of clear and easy to understand language are fundamental. The digital presentation of new offers, solutions and products is full of technical jargon, but to convince older users, a clear and simple language is needed to explain the added value and how to use applications, in detail.
For banks, it is also important to include older customers’ relatives in their digital offers. Children and grandchildren are often the first point of contact for the older generation when it comes to digitalization, as they provide support for questions about computers and smartphones.
For this reason, providers of products and services for older people often also address their immediate relatives in their offerings. In digital banking, however, this should by no means be limited to customer acquisition. Opportunities for shared access to an account, for example via co-browsing, can take away the customers' fear of doing something wrong. With the support of a familiar person, new applications can be explored together, thus reducing the older user’s reservations more quickly.
«For banks, it is advisable to use specially trained staff»
In addition, banks themselves need to provide assistance. This can be done, for example, via remote access or by specialist advisors who connect to the system via telephone. For banks, it is advisable to use specially trained staff who have a deeper understanding of the challenges and fears of the older target group.
Last but not least, financial institutions also need to emphasize the trustworthiness and reliability of their offerings. Traditional institutions have the advantage of having been established and appreciated in the market for decades. Reliability and trust should not only be proactively addressed but form part of the brand.
Non-binding online demonstrations, for example, which initially do not require the input of personal data, can help. Clear explanations (e.g. in video form) of why personal data is being collected and how the security of payments is guaranteed can also lower the inhibition threshold. Banks must also respect certain preferences. Unlike millennials, for example, older generations find filing paperwork important.
«Banks must ensure that they address all target groups as part of their digital offering»
Seniors-friendly applications do not need to be developed specifically for this target group. Existing offerings that address a broad spectrum of customers will also be of interest to the older generation. After all, a simple and intuitive user experience will delight the old and young alike.
Finally, the older customer group is not a monolithic block, and age is also not the only differentiating factor. The living standards of the older generation are diverse, while levels of digital participation range from tech experts to determined ‘online agnostics. Nevertheless, banks must ensure that they address all target groups as part of their digital offering, making the most of the AgeTech potential which is still greatly underestimated today.
Agnieszka Walorska is an expert in digitization and Executive Director at Capco. She combines her expertise in methods such as Design Thinking, Lean Startup, User-Centered Design and Agile with her enthusiasm for technology trends and their impact on products and business models. She has led several transformation and innovation projects for banks, insurance firms, pharmaceutical and automotive companies. The digital strategy consultancy Creative Construction, which she founded, was acquired by Capco in 2020.
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