Digital money for seniors

A data-driven guide on adjusting to the digital future of banking

A data-driven guide on adjusting to the digital future of banking

Insights into digital banking

In the last year or so, we’ve all benefited from being able to go online. The internet has kept us entertained and connected. During the times we couldn’t get out and socialise, it was a lifeline.

But it’s not just a social connection the internet offers us. If they weren’t already, many businesses moved their services online during the pandemic. It’s hugely convenient to be able to get stuff done from the comfort of your own home – paying bills, ordering groceries, managing subscriptions, and so on. It seems like most industries are embracing a digital future where possible – including banking.

Money management has arguably never been easier. Most of the transactions people need to do can be done online or using a smartphone. There are not many reasons you’d need to go into a branch. In fact, you’ve probably noticed many branches closing down across the country.

But what about people who aren’t as used to being online?

It’s no secret that some seniors can struggle to get used to new technology. Age continues to be one of the main factors in digital exclusion, with many seniors feeling left behind by the technological tide. Due to the pace of change, it’s hardly surprising. Take contactless card payments, for example. Its adoption for lower value purchases is now widespread, including on the London Underground.

For a lot of people, the move away from a cash-centric society feels quite natural – almost inevitable. In fact, it was way back in 2014 that non-cash payments exceeded cash payments by volume for the first time in the UK. But the use of digital payments has largely been designed with the mass market in mind, not necessarily those who have grown up mainly using cash. Sleek plastic cards and shiny mobile devices can feel quite alien if you’ve relied on cash for most of your life.

Why digital inclusion is so important

The rapid move towards online services could mean that some people may not be aware of the advantages of online banking. The most recent Office for National Statistics (ONS) figures busted the myth that ‘everyone’ was online as a result of the pandemic.

While the number of over 75s using the internet has nearly doubled since 2013, from 29% to 54%, that still leaves 46% of this age group digitally excluded. From the most recent data in 2020:

  • Of all those surveyed aged 75 and over, the following amount had used the internet in some capacity in the past three months:
    • 59.4% of men
    • 49.8% of women
  • The same survey found that in this demographic a surprising amount of individuals had never used the internet:
    • 43.3% of women
    • 33.1% of men     

If you’ve been working, shopping, communicating and accessing services online, it’s easy to assume everyone else is. That’s just not the case.

In terms of what seniors (of people aged 65 and over) are – and aren’t – doing online, the ONS found:

  • 72% (of people aged 65 and over) use the internet for sending and receiving email
  • 64% use it to find information about goods or services
  • 49% use it for internet banking
  • 47% use it for reading news, newspapers, or magazines
  • 40% use it to look for health-related information
  • 38% use it for instant messaging services
  • 34% use it for social networking
  • 34% use it for watching video content
  • 33% use it to watch TV, live or on catch-up
  • 24% use it to listen to or download music
  • 21% use it to make video or voice calls
  • 19% use it to make appointments with medical practitioners
  • 17% use it to watch video on demand from commercial services
  • 17% use it for online medical consultations or to request prescriptions
  • 8% access personal health records
  • 6% use it to sell goods

As the public sector, businesses, and entertainment providers increasingly turn to digital technology to engage with their customers, it’s crucial it’s inclusive. Of course, it would be ideal for many businesses if everyone could embrace a digital approach, but they do have to take care that nobody gets left behind. Services should be designed and delivered for everyone.

For financial services, for example, you need access to a current account to get paid a salary, a pension, or any benefits, and it allows you to pay your bills. With responsible financial behaviour, you can build a good credit score and access a wider range of financial services, such as credit.

Of course, you can open a bank account and do numerous things in a branch. But without a doubt, branch closures are increasingly common and banks without any bricks and mortar presence are on the rise. Consider, for example, challenger banks such as Monzo, Revolut, and Starling Bank. These changes can be hard to adjust to – especially if you’re not online and have been using your local branch for years.

Although not every older person is a natural silver surfer, numbers are moving in the right direction, as the ONS data shows.     

But there’s still a lot of people to get online, if they’re willing. So the challenge is providing truly inclusive access to digital services. If a system doesn’t work – for example, setting up a direct debit online – it’s unlikely someone will use it again. That’s probably why we see older people using online services, and then stopping.

Digital money and the elderly

Banking is one of the areas reluctant internet users may feel the most uncomfortable with. After all, it’s their money we’re talking about. They may have embraced or become more familiar with video calling or streaming TV, but still prefer to go into a branch for banking tasks – despite banks urging customers to use online channels during the coronavirus outbreak.

Benefits of using online banking for seniors

Adopting a new form of money management can be daunting for anyone. As such, it’s important to understand what benefits come with a swap to the world of online banking. Some advantages of online banking, which seniors might not be aware of include: 

  • The ability to check your account from anywhere. While monthly paper statements help you stay on top of your finances to a point, online banking makes it possible to check how much money is coming out of an account on a daily basis. This is particularly handy if a person needs to make a big payment but isn’t sure if they have the necessary funds in their account.
  • Transferring money quickly (even overseas). With international travel being common, it could be that many rarely get the chance to see their family. If they have children or grandchildren living overseas, but want to treat them to something nice, online banking makes it quick and easy. The same is true if they’re in the UK.
  • Paying bills instantly. A mobile banking app will save contact addresses, institution names, and even the basic personal details of friends and family. This makes it easy to quickly pay bills that are owed. What’s more, it’s even possible to set up standing orders – meaning there’s far less admin needed to make bill payments. 

How to set up online banking

Like most things in life, the biggest stumbling block for starting online banking is taking the first step. Moving something which has traditionally been an in-person activity to a computer screen can be daunting. 

Whether you’re doing it yourself or supporting someone else’s move, here are some steps to keep in mind when it comes to transitioning to digital banking:

  1. Collect personal details. The first step anyone should take in setting up an online account is to collate as much personal information as possible. Banks will understandably want to ensure they’re dealing with an actual person, rather than someone trying to fraudulently access funds. Full names, contact details, addresses, and bank account details (such as sort code or account number) are useful here.
  2. Download your bank’s app. Each bank which offers online banking should have their own app. Find yours by searching for the name of your bank in your smart device’s app store. Click to download and it should appear on your device after a few minutes.
  3. Create login information. Next, you’ll be asked to create a user ID. This usually means a username, password, and possibly even a numerical code. If someone has a smart device which allows them to log in user face ID or a fingerprint scan, the numbered code won’t be necessary. Make sure to keep a note of any passwords or usernames.
  4. Security check. At this point a bank will normally want some evidence that you are who you say you are. This will involve them sending an email or text message with a code. You will be asked which method of contact is more convenient.
  5. Verify for your identity. Once you have the code (usually four-to-six numerical digits) you’ll be able to either enter it on your banking app, or in the event your bank calls you, read it orally to someone on the other end of the phone.
  6. Add accounts. Once you’ve accessed the app, you’ll be able to manage and add pre-existing bank accounts. Each bank will ask for you to do this differently, but the key information you’ll need is your account number, sort code, and personal details.
  7. Start banking online. At this point you should be able to start banking online. If you have any issues, make sure to get in direct contact with your bank for support. 

Insights into banking behaviour

Without a doubt, there are apprehensions around using apps and websites for banking due to security concerns or a lack of familiarity with being online. Research from Which? found that one in five Britons exclusively use non-online banking options. And people – even those who use online banking – remain reluctant to use it for some tasks:

  • 49% of the surveyed banking customers said they weren’t confident using an app to apply for a credit card or loan
  • 42% said they weren’t confident using a website to complete the same task

Those surveyed were people aged 55 and over.

So, if they’re not using apps or websites to do these tasks, they will rely on branches. But they may encounter some issues.

Branches may have closed their doors altogether, or only be open on certain restricted days and times. Not all branches can perform all banking functions too. Between 2012 and 2021, the total number of bank and building society branches in the UK fell by 34%.

Cashpoints are disappearing at an alarming rate too. Research published earlier this year shows that the total number of ATMs in the UK has fallen each year since 2015. Between July 2018 and February 2022, the total number fell by 12,968, or 20%. At the beginning of February 2022 there were 52,969 ATMs in the UK, 77% of which were free to use.

For older people living in areas with limited public transport, seeing their local cashpoint go can be troublesome. We have to consider that many older people may have problems with mobility, making it difficult (and costly) to travel further to an ATM or bank. And then, of course, many cashpoints charge fees for withdrawing money. All in all, cash users can be at an incredible disadvantage. For pensioners who rely on their state pension, these extra costs could easily eat into their money for living.

So, what’s the answer? Age UK defines age-friendly banking as “banking products, services and facilities that remain accessible and easy-to-use as people age, assist caregivers and prevent financial exploitation.” Although there seems to be this big rush to get online, it’s not an adjustment many older people will be comfortable with (or potentially ever make), so services have to be designed with that in mind.

According to Age UK, creating an age-friendly bank is all about:

  • Customer service. Older people have specific needs, so staff need to be trained to recognise them and respond appropriately. Examples include:
    • Customer-centred service, listening carefully, talking clearly without being patronising, and being aware of any vulnerability
    • Personalised call centres, with pick-ups by human operators who focus on the customer’s issue, not upselling
  • Physical design. Branches need to be accessible, and if they’re not available at all then suitable arrangements should be made. All interfaces a customer could interact with (ATMs, phones, computers, tablets, mobiles) need to be accessible for people with a diverse range of abilities. Age-friendly banks should also make their accessibility options known to all customers, not just those who ask. Examples include:
    • Cards, machines and apps all designed to take into account age-related perceptual and motor issues (Age UK provide the example of one person who struggled to get her bank card out of an ATM because of arthritis in her hands)
    • Testing new technologies with older users
    • ATMs in safe non-street locations
  • Systems. All systems – whether online, in a branch or on the phone – should reliably meet the needs of older people. This could mean offering a range of access channels. Examples include:
    • Electronic cheque imaging to make sure older people who have a preference for paper-based instruments can continue using them alongside new digital technology
    • Flexibility with ID requirements for customers without passports or driving licences
    • New ways of ‘passing security’ that don’t rely on remembering complex information
  • Products. Financial products should be designed to fit people who are later in life, rather than excluding them. For example:
    • Not defaulting older customers to low interest accounts – instead, helping them to find the best rates easily
    • Removing blanket age limits on some financial products such as mortgages
  • How a bank sees itself. The more a bank sees itself as responsible for all its users and stakeholders, the more likely it is to adopt practices and design services that are friendly to the older generation.

Understanding and protecting against threats when online banking

There are a variety of steps a person can take to make sure their sensitive information is kept as private as possible. In most cases, it won’t even require the use of fancy tools or equipment. 

  • Regularly check your bank account. If a person uses an app to manage their money, they can look at it every day to make sure there aren’t any odd transactions coming in or out of their account. The quicker an issue is spotted, the quicker it can be reported and hopefully resolved.
  • Use strong passwords. While it might be tempting to use the name of something dear to a person as a password, it makes more sense to use a random series of numbers and letters (as well as other characters like commas and speech marks) to make a password less easily guessable.
  • Use anti-virus software. This might sound a little more complex but installing anti-virus software is actually quite easy. You usually just need to buy it from a computer store, then insert a disc and let the software do its thing. You can also download reputable anti-virus software if your laptop or tablet doesn’t have a disk drive. Apple products come with these built-in, which means they’re already protected against some online threats.
  • Do not share private information on social media. While social media is a fun place to share with friends and family, it’s important to remember that there’s a limit to the information we should put on the internet. Exact addresses, email addresses and even dates of birth can all be used to try and steal your identity.
  • Do not transfer money on public Wi-Fi. Public connections are an unknown landscape. There’s no guarantee they’ve been set up to properly protect sensitive information, and as such should be avoided when it comes to the transfer of financial data. 

What a bank does to keep money safe online

It’s great to have clarity on what can be done on an individual level to keep money safe – but what are banks doing to ensure the funds they’re holding onto are kept secure? Here are some of the steps which most banks will take to guarantee an account doesn’t fall victim to fraud or theft.

  • Multiple log in steps. A lot of banks will ask for more than just your username and password to be able to access your account. You could also be sent a verification text message or email with a code.
  • Encryption. Any good bank will ensure that all sensitive information is encrypted. This term means that all personal details are protected and inaccessible to anyone other than the initial user and the bank. 
  • Warnings when you send money. It’s also become common practice for a bank to send you a warning in order to double check any bank transfers. While most of the time you will be sending it to the right account, this handy alert gives you the chance to double check all the details are right.
  • Apps which time you out. If you accidentally leave an app open, but aren’t using it, your bank will time you out after a certain period of time (usually a few minutes). This prevents anyone else picking up your device and taking action on your account without your permission. 

The main challenges for seniors

The older population is highly diverse. Many elderly people will remain fit, healthy and able to take advantage of new technological changes for years to come. But others will face changes, such as potentially being less mobile or having physical disabilities which may make certain tasks challenging.

Although not everyone will face these, here are some of the main challenges for seniors trying to access online banking:

  • A lack of digital skills and confidence online. Younger people tend to have greater resilience in coping when things go wrong online or are poorly designed. For example, having a payment pause online and having to redo an order is likely to be more off-putting for an older user. It can feel unnerving when you don’t have confidence online or much trust in digital services.
  • The costs. To get online, you not only need to pay for an internet connection – you also need a computer, laptop or tablet. The income of older people, especially pensioners, may be less than what they had in their earlier working years. It might not feel worth it.
  • Availability of services. If people don’t want (or cannot afford) to have an internet connection at home, they might be able to access free computers and WiFi at places like cafes, libraries, and other local centres. But this would’ve been heavily restricted throughout the pandemic, and free services aren’t widespread.
  • Physical challenges. Physical disabilities, including deterioration of sight and hearing, or arthritis in the hands, can make it much harder to use devices.
  • Cognitive decline. As people get older, certain cognitive tasks may become a bit more challenging. For example, banking often requires you to remember numerous passwords or security codes, and call centres often rely on automated menus which can be tricky to navigate – especially when you’re under stress.
  • Disinterest in going online. Not everyone is interested in going online. And that’s OK.
  • Preference for in-person interactions. There are multiple ways that people can access their bank accounts and banking services. People could use a mix of channels (mobile or desktop apps, online, over the phone, in branch) depending on their needs, but they may always prefer to talk to someone in person in a branch. In these cases, the closure of branches is particularly problematic.
  • Fear. We hear a lot of negative things about the internet – fake news, online fraud, and so on. If it’s not something you’re familiar with, it can feel like quite a daunting prospect – and one where you might be taken advantage of.
  • Financial exploitation. Indeed, it’s true that older people are often targeted. It’s a challenge to keep them protected online, as they’re not only singled out in the hopes they’ve built up a lifetime of savings, but because they can be more vulnerable.

A lot of these challenges can be overcome with a bit more awareness. Educating older people about the realities of going online – including the benefits and things to be aware of – can help them feel more comfortable.

But there is also a huge emphasis on what banks can do to improve their current offerings. We shouldn’t assume people aren’t going online simply because of their age; we should work towards an offering that is appealing for all users.

Initiatives from the financial industry

Regardless of age, health, or economic circumstance, everyone should be able to bank safely in a way that suits their needs.

Luckily, the banking industry doesn’t stand still. In the last few years alone, we’ve seen rapid change. Although some users may have initially been forgotten in the transition to online banking, it’s an industry that’s quick to innovate – which is great news for older bankers. After all, they are important customers with valuable financial resources. Banks should be focusing on what they can do to improve their services for older people.

More than anything, though, the benefits of addressing common challenges of online banking for older individuals – including a lack of confidence, usability issues and limited or inaccessible functionalities – will end up optimising the digital experience for all users.

Teaching

The idea that you shouldn’t have to show someone how to use technology, that it should be intuitive, is flawed. Teaching and supporting older people is one of the best ways to help them embrace new technologies. There are numerous initiatives and programmes within the industry, aimed at improving people’s digital skills and confidence, including:

These are just some of the programmes on offer. They act as a catalyst for financial inclusion by giving people the skills and information they need to feel confident banking online. Although they’re fantastic for older people, many of these programmes can be used by anyone looking to boost how comfortable they are using digital services. It’s beneficial for most customers to upskill on a range of topics, including money management and fraud awareness.

Mobile banks

To make sure people can access banking services wherever they live – and regardless of their age, disability or any other vulnerability – mobile banks are a great alternative. With a fleet of vehicles that has been growing since 1946, RBS provides mobile branch banking to customers across the UK.

It started off as a service for those in remote parts of Scotland, but it’s now available to hundreds more customers who, for whatever reason, aren’t able to get to a local branch. Services on offer include cash transactions, bill payments, account balances, and cheque deposits. And for those with a mobility disability or visual impairment, RBS can even provide a door-to-door service.

Mobile banks aren’t the only way to increase accessibility offline. There are plenty of ways banks can improve how age-friendly they are. Nationwide branches, for example, have Helping Hand kits designed to help customers who might need additional assistance. They include things like:

  • Pen grips for greater control when writing
  • Lap-pads and clipboards to provide writing places away from the main counter
  • A4-sized passbooks and pen magnifiers to increase the visibility of written documentation
  • Cheque book templates to help customers correctly complete each section of a cheque

Technology can be of help too, as it’ll be recorded in the customer’s profile that they use the Helping Hand unit, so the knowledge can be shared across any branch.

Security measures

Any improvements to security measures are welcomed by all customers, regardless of age. But there are specific campaigns to educate older customers – for example, the Financial Conduct Authority has run a communications campaign, ScamSmart, aimed at educating and warning older people against pension and investment fraud.

Thanks to open banking, a relatively new service which allows customers to link up bank accounts with apps, you can also set up alerts if spending on your account is unusual. Kalgera, for example, will alert a carer or loved one of any suspicious activity on bank accounts they monitor. Another app, Touco, allows approved people to help manage the financial affairs of others. Those who give visibility of their accounts to others have complete control over what they share.

Older customers can also choose to grant power of attorney to a third party, allowing them to carry out banking on their behalf if they lose the capacity to do so.

How you can support your elderly relatives

All too easily, we may assume older people are less digitally savvy, and mistrustful of digital channels. While many may need additional training or support to make the most of digital banking, it’s important to stress that people don’t always fit the box into which they’re placed. If you have elderly relatives or spend time with other older people, you may have experienced their frustration if they’ve ever felt patronised or misunderstood.

But it’s important we help those around us adjust – if and when they’d like to. Having someone they trust alongside them when setting up things like the internet and email accounts, or starting with a new smartphone, can make a huge difference.

You can start by:

  • Asking them. We often make assumptions about what older people will want to do. But we shouldn’t just take it for granted that a whole group of people don’t want to get online. It all starts with a conversation – find out if they’re interested or what’s holding them back.
  • Talking about the benefits. Having an internet connection at home means you can connect with other people and get tasks done online. This could include shopping, paying bills, or even connecting with public services such as a GP. Being able to do this from the comfort of their own home would be extremely useful for most older people. Not to mention the entertainment potential of the internet. Just chatting about what’s possible online can be enough to get people intrigued.
  • Offering your help. Simply let people know you’re happy to help. It’s worth giving a certain time and being patient – it may take longer than you expect, so it’s important not to feel rushed.
  • Watching your wording. If you’re helping someone, think about the jargon you might use without thinking. Not everyone will know what you mean by an app, or understand how to swipe.
  • Researching devices or apps. It’s important to arm yourself with helpful information, such as what device would be easiest for an older person to use. For example, small touchscreens could be tricky if they have limited dexterity. Also consider pre-installing the necessary apps onto their tablet or smartphone.
  • Sharing security tips. One of the most important things you can install is antivirus software. Let whoever you’re helping know this will help protect them from viruses and other internet threats, but do share some advice for keeping them safe online. For example, not sharing passwords or how to spot a scam.

What you’ll end up helping with will depend on how your elderly relative or friend would like to use the internet. We’ve spoken about lots of benefits – but they might just be interested in one or two activities. For example, during lockdown video calling was popular as it recreates face-to-face interaction. The more someone can do these things, the more comfortable they’ll be. It’s all a step in the right direction.

Online banking FAQs

It’s understandable that anyone using online banking for the first time might have questions. Whether you’re looking to provide clarity on those for someone else, or want to know the answer yourself, here are some common queries to keep in mind.

Do I need any additional equipment to bank online?

Most modern forms of digital banking will not require you to use any additional devices – although this may depend on the bank. If you feel more comfortable, a chip authenticator (a small device similar in shape to a card reader) can sometimes be used to access an account. This requires the account holder entering their card and verifying their identity (usually with a pin).

Are there any additional fees or charges to online banking?

The process of online banking won’t cost anything, but there may be other secondary fees to keep in mind. For example, your network provider might charge you for downloading the banking app. The type of account you open with your bank may also ask for monthly premiums.

Do all banks offer internet banking services?

Almost all banks will offer some kind of online service. While these may differ depending on your provider, it’s safe to assume there will be digital options for any account holder. Make sure to get in contact with your bank to find out what options are specifically available to you.

Can I use online banking on different smart devices?

Yes. While you might be limited to the number of devices which you can use at one time, you will be able to access any online accounts across different smart devices. For each device you’ll need to download the app in order to be able to use it.

Are passwords and memorable answers the same on all devices?

Yes. Your account details won’t change just because you’ve logged in through a different device. These are consistent no matter how you choose to log in, which means you should never have a problem as long as you can remember them.

Can I use online banking abroad?

When connected to a private WiFi, you will be able to access all the features of online banking. Things may differ depending on your provider if you’re using public data. This is something worth checking before you head overseas.

What happens if I lose my log in details?

In the unfortunate event that your details are lost, you’ll be able to contact your bank to either retrieve or reset them. They should be able to get in contact with you via the phone or email address you used to sign up for online banking in the first place. They should also ask you security questions.

Can I manage direct debits and standing orders online?

Yes. You can set up and manage any regular payments to people using online banking. That means if you have a standing order which you pay every month, you can use your banking app to change or stop it at the click of a button.

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