It’s official: we’re getting older and living longer. That’s true not just in the UK and Europe, but in countries worldwide. But are older customers currently being served by financial service providers?
It started in Spain with an online petition, provocatively titled Soy mayor, NO idiota – I’m old, NOT an idiot.
It campaigned for banks to stop excluding older customers by closing branches and pushing transactions online. It worked as at the end of February, the Spanish authorities published a 10-point plan, guaranteeing elderly people “personal, humane, high-quality treatment.”(1)
The Spanish campaign has wider relevance as many countries face an ageing population. For example, the number of over-65s in the UK is expected to increase by nearly 2% during 2021-22 to 12.7 million. That’s almost 20% of the population, the highest this age group has ever been.(2) And the over-85 age group is expected to double by 2041.(3)
This changing demographic brings both opportunities and challenges for financial service providers, society and the economy more generally.
What’s the problem?
Digital transformation is a double-edged sword. It’s improved access and choice for many, particularly where physical access has been difficult – during Covid lockdown, for example. At the same time, it’s excluded some who lack the technology, skills or willingness to interact with their finances digitally.
The trouble with access issues is that they’re extremely diverse. They affect different people differently at different stages in their lives. Yet it can mean customers are unable to find products to fit their needs at a price they can afford. And effectively puts financial services out of reach.
Sometimes the barriers are practical: process requirements, bureaucracy, rules and other measures. Often in financial services this is around identity documents and eligibility.
Sometimes the barriers are physical and digital. That’s things like bank branch closures or reliance on technology or automated systems. This can exclude those who find cash machines, PIN pads and telephone banking hard to use due to dexterity or hearing issues.
Poor internet and/or mobile connectivity, particularly in rural areas and so-called ‘not spots’, are another physical barrier. It makes accessing online services, receiving SMS one-time passcodes and managing money digitally quite difficult.
Then there are barriers around comprehension and comparison: unnecessary jargon, introductory rates and offers. These can be difficult to understand, leading to confusion, frustration or simply an inability to compare products.
What could fix it?
Barriers to accessing financial services don’t just apply to older people. However, this age group is more likely to encounter multiple or overlapping barriers. For example, branch closures in rural areas combined with difficulty using automated systems and digital technology. This can prevent older customers from engaging with and using financial services.
The flipside, of course, is that a ‘gap in the market’ for a consumer equals a business opportunity for a provider. Customers and their needs are broad. So, providers should consider how they segment customers. Segmenting by age, demographic, income etc. may not be a good proxy for need.
Think about those with slightly unusual or ‘non-standard’ needs. They can challenge systems seemingly designed for ‘average’ customers. For example, 12 million people live in rural or remote areas of the UK.(4) That’s nearly one-in-five customers potentially shut out due to connectivity issues.
When it comes compliance and crime prevention measures, providers should be honest. Are ‘security reasons’ merely an excuse to decline customers? Or deliver less-than-inclusive service? 11 million Brits don’t have a driving licence or passport, making it difficult to prove identity in a ‘standard’ way.(5) That’s a lot of potential customers and revenue to leave on the table.
Providers need to consider how they design, deliver and price their products. Plus, monitor customer experience post-launch to evolve their products. The sweet spot is launching compliant financial services that work commercially. And plugging gaps in the market where consumers struggle to access financial products and services.
How Monavate can help
Monavate aims to demystify finance, making it accessible to all, simplifying and improving how people pay the world over.
If you’ve got a great idea. Maybe it’s to help people buy things more easily. Or afford something they really want. Come talk to us.
We offer BIN sponsorship as a fully managed end-to-end product. Our knowledge and experience, particularly around card scheme rules and economics, help make for profitable financial products. And our tech will have you up and running in no time.
To find out more about issuing BIN sponsorship and the Monavate difference, contact Barry Thirkell on 01223 626 584 or e-mail firstname.lastname@example.org
1 Spanish Ministry of Economic Affairs and Digital Transformation, press release, 21 February 2022
2 Population aged 65 and over, IBISWorld, 15 November 2021
3 Living longer: how our population is changing and why it matters, Office of National Statistics, 13 August 2018
4 Statistical Digest of Rural England Population, DEFRA, 28 October 2021
5 ‘More than three million UK voters have no form of photo ID’, The New Statesman, 11 May 2021