How fintech can boost access for the older generation

The UK faces a finan­cial dig­i­tal divide. We have a soar­ing fin­tech indus­try that puts a vast range of bank­ing ser­vices in the pock­ets of mil­lions of con­sumers.  But as a coun­try with an age­ing pop­u­la­tion, a grow­ing num­ber of peo­ple say they are dis­crim­i­nat­ed against and even locked out of finan­cial ser­vices.

It’s known that old­er cus­tomers pre­fer to vis­it bank branch­es. Yet between 2012 and 2021, the total num­ber of bank and build­ing soci­ety branch­es in the UK fell by 34%, accord­ing to the House of Com­mons Library.  Across Europe, peo­ple over the age of 55 make up a third of the pop­u­la­tion, while a fifth are over 65.  

Finance Watch is a Euro­pean non-gov­ern­men­tal organ­i­sa­tion that con­ducts research and advo­ca­cy on finan­cial reg­u­la­tion. “Old­er peo­ple in Europe face an array of bar­ri­ers when try­ing to access basic finan­cial tools that keep them in the finan­cial wilder­ness,” it states.

“The cur­rent finan­cial land­scape puts old­er peo­ple at risk of exclu­sion. Going for­ward, soci­ety and pol­i­cy­mak­ers alike must take into con­sid­er­a­tion how dig­i­tal­i­sa­tion, age lim­its, low incomes and gen­der impar­i­ty affect finan­cial inclu­sion out­comes in the pre-retire­ment and retire­ment stages of life.”

Opening doors

Younger con­sumers eas­i­ly made the tran­si­tion away from cash to dig­i­tal pay­ments, dri­ven by the pan­dem­ic and lock­down. How­ev­er, old­er con­sumers have strug­gled.  Accord­ing to the Office for Nation­al Sta­tis­tics (ONS), only 7% of over-70s are like­ly to be able to shop and man­age their mon­ey online. 

A fear of falling vic­tim to fraud is a major con­trib­u­tor to the reluc­tance of many old­er peo­ple to embrace dig­i­tal tech­nol­o­gy. Accord­ing to US research, although those in their six­ties make up just 11.5% of the Amer­i­can pop­u­la­tion, they account­ed for 18% of coro­n­avirus fraud vic­tims.

“Finan­cial choice must be acces­si­ble to all cus­tomers, regard­less of age,” says Simon Hewett-Avi­son, direc­tor of ser­vices at UK char­i­ty Inde­pen­dent Age.  “It can be dif­fi­cult to sup­port the con­tin­ued shift to online while cater­ing to loy­al cus­tomers who pre­fer to remain offline but main­tain­ing this choice must remain a pri­or­i­ty for the finan­cial indus­try.”

Hewett-Avi­son wel­comes ini­tia­tives such as the dig­i­tal lit­er­a­cy pro­grammes run by organ­i­sa­tions like Nation­wide, Voda­fone and Bar­clays.  But more must be done, he argues.  

“As the cost-of-liv­ing cri­sis real­ly takes hold, the finan­cial indus­try is in a unique posi­tion to sign­post cus­tomers to extra sup­port like Pen­sion Cred­it,” he says, point­ing to a UK gov­ern­ment ben­e­fit that tops up a per­son­’s retire­ment income and can open a range of oth­er enti­tle­ments, such as a Coun­cil Tax reduc­tion. Take-up is low, with more than 800,000 peo­ple miss­ing out, Hewett-Avi­son says. “We urge more banks and fin­techs to use their plat­form to pro­mote this life-chang­ing sup­port.”

The fin­tech firms them­selves are keen to demon­strate their com­mit­ment to old­er cus­tomers. Mon­zo, for instance, offers cus­tomers tele­phone sup­port and allows them to del­e­gate their account access to a trust­ed third par­ty, who can sup­port them when need­ed.  As well as using sim­ple, clear lan­guage and offer­ing an option for a larg­er font, the com­pa­ny is research­ing the acces­si­bil­i­ty pro­vi­sion of the var­i­ous mobile phone sup­pli­ers. Mon­zo has seen its cus­tomers in the 70-plus brack­et more than dou­ble over the last two years and has 300 cus­tomers who are over the age of 90.

Wise runs work­shops and edu­ca­tion­al ses­sions in-house to increase its employ­ees’ under­stand­ing of cus­tomer needs and the sit­u­a­tions in which they will use the app.  It recent­ly ran an ‘empa­thy lab’ where staff donned arthri­tis sim­u­la­tion gloves and vision impair­ment glass­es to test the ease of use of its prod­ucts. 

Rev­o­lut points to the increase in its cus­tomer base among old­er age groups.  Year-on-year, those in the 55-to-64 age brack­et have increased by 128%, while num­bers in the 65–74 age group are up 136%.

Government action

The gov­ern­ment is not rely­ing on fin­tech com­pa­nies and banks to make access eas­i­er for elder­ly cus­tomers. The Finan­cial Ser­vices and Mar­kets Bill announced in the Queen’s Speech has pro­vi­sions designed to shore up the country’s cash infra­struc­ture.  Accord­ing to Eco­nom­ic Sec­re­tary to the Trea­sury John Glen: “We know that access to cash is still vital for many peo­ple, espe­cial­ly those in vul­ner­a­ble groups. We promised we would pro­tect it, and through this Bill we are deliv­er­ing on that promise.”

This debate takes place against the back­drop of the growth of ‘AgeTech’, tech­nol­o­gy that aims to help old­er peo­ple.  In Decem­ber, for instance, Ama­zon announced the launch of Alexa Togeth­er, which is intend­ed to help fam­i­lies car­ing for elder­ly mem­bers who are still liv­ing inde­pen­dent­ly but might need extra sup­port.  There is clear­ly poten­tial for this and oth­er tech­nolo­gies such as AI and machine learn­ing (ML) to make bank­ing tech­nol­o­gy eas­i­er and safer for old­er peo­ple. 

Kalgera, for instance, uses ML to analyse finan­cial trans­ac­tions for signs of vul­ner­a­bil­i­ty in the user and the risk they could fall vic­tim to scams.  It also aims to help elder­ly cus­tomers share their finan­cial trans­ac­tions with trust­ed fam­i­ly and friends in secure, view-only mode, so they can also be alert­ed about risks or pos­si­ble frauds.

The tech­nol­o­gy is avail­able, the cus­tomer base is large and grow­ing and the poten­tial to tick cor­po­rate social respon­si­bil­i­ty box­es is evi­dent.  The chal­lenge now is for banks and the fin­tech sec­tor to meet the demand and make the most of this oppor­tu­ni­ty.