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 means older people risk being isolated from banking – amongst other things – if they don’t adjust to a digital future. An Age UK study busted the myth that as a result of COVID-19 ‘everyone’ was now online, confirming that more than 42% of over 75s still weren’t using the internet. That’s nearly two million people in this age group in England digitally excluded in a COVID-19 world and beyond.
If you’ve been working, shopping, communicating and accessing services online during the pandemic, it’s easy to assume everyone else is. That’s just not the case.
In terms of what older people are – and aren’t – doing online, Age UK revealed some more detail:
- 33% of those who were not using email in 2018/19 were doing so in 2020. Nearly 9% who were emailing in 2018/19 no longer did so in 2020.
- 15% of those who were not managing their finances online in 2018/19 were doing so in 2020. 19% of those who were managing their finances online in 2018/19 no longer did so in 2020.
- 30% of those who were not shopping online in 2018/19 were doing so in 2020. Just 21% of those who were shopping online in 2018/19 no longer did so in 2020.
It would seem there is both an increase and decline in internet use. Once older people start to arrive online, it doesn’t necessarily mean they are going to stay.
But 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. ONS data, reported by the Guardian, showed that the number of older people going online has shot up from 29% in 2013 to over half in 2020.
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.
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?, reported by Money Expert, 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 January 2015 and August 2019, Which? found there were 3,303 branch closures – a 34% reduction in the overall branch network. COVID-19 could be accelerating this further, with The Financial Conduct Authority asking banks to reconsider branch closures if banks wouldn’t assess the needs of customers and provide alternative arrangements.
Cashpoints are disappearing at an alarming rate too. Which? research showed that nearly 10 million people are not ready – or able – to give up cash, yet the number of ATMs in the UK has fallen by 13,000 in the last three years, from 67,300 to 54,400.
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.
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.
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:
- Age UK’s digital drop-ins
- RBS Digital Lessons
- [email protected]
- Barclays’ Digital Eagles, with dedicated services for those in care homes
- Lloyds’ partnership with We Are Digital, with remote training and 2,000 free tablets for the over 70s
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.
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.
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.