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.”
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%.
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.