For years, my octogenarian mother-in-law told me she would never use mobile banking. Despite my encouragement, she didn't want anything to do with it. But a year into the pandemic, she uses it nearly every day to check her balance and connect to her finances. It gives her comfort knowing her money is still there.
And like most people who get used to the convenience of mobile banking, she'll never give it up.
During COVID-19, many of her generation jumped on digital channels as a survival mechanism. They quickly learned new technologies and new tools, from in-app grocery ordering to online vaccine registration. And they increased their use of mobile and online banking tools.
In 2020, 46 percent of seniors (age 75 and older) used eBills in the prior 30 days, compared to 40 percent in 2019, according to Expectations & Experiences, a consumer trends survey conducted by The Harris Poll on behalf of Fiserv. Seniors' use of automatic recurring payments increased, too, from 65 percent to 79 percent. And while their use of digital wallets remains low (7 percent), it more than tripled since 2019.
Many in the banking industry underestimated seniors' ability and adaptability to adopt digital channels, assuming a push for mobile and online banking tools would find a receptive audience only in younger generations. But the pandemic taught us that seniors deserve more credit for quickly learning new technologies.
It has been the perfect storm for the digital adoption we're seeing in the senior market.
Showing Seniors the Way
Not that long ago, older people taught younger ones about banking and finances. But when it comes to digital banking, younger people are showing older generations how to consume financial services differently, reverse mentoring them into new ways to manage and move money. It's not unusual for teenagers to teach grandparents how to send money or deposit a check with a smartphone, for example.
Banks and credit unions are also showing seniors the way. As the pandemic began, many community financial institutions called customers and members to hear their concerns and provide personalized coaching. Larger financial institutions relied more on contact centers and chat for outreach and, like their smaller counterparts, have done a tremendous job moving people to digital channels.
No matter how it happens, it's important seniors know the benefits of online and mobile banking tools and how to access them. When financial institutions are enthusiastic about what technology means for their customers and members, it's contagious across generations.
Improving the User Experience
To say seniors need a simpler user experience underestimates their technology skills and is fundamentally misguided. All consumers want easier, faster and safer digital experiences.
Moving complexity to the background – out of view, out of the customer experience – makes financial services as simple as possible for everyone, especially new users. A simpler user experience means consumers don't have to choose the most effective and efficient way to make a specific payment. They don't have to navigate through multiple clicks and encounter language they may not understand.
An accessible and user-friendly experience, including clear steps, easy-to-read fonts and high-contrast colors, benefits consumers of any age.
The largely untapped senior segment represents the biggest potential gains for new digital banking users.
Marketing Digital Banking to Seniors
The largely untapped senior segment represents the biggest potential gains for new digital banking users. Yet seniors aren't included in many financial institutions' digital marketing strategies, messaging and imagery, which may affect organizations' ability to reach their digital adoption goals.
In marketing digital banking to seniors, branches can be financial institutions' most important sales channels. Through signage, tutorials and one-on-one conversations with staff members, financial institutions can promote mobile and online banking tools and walk new users through how to use them. Expect to see the continued convergence of the branch and digital channels, specifically around sales and marketing messages.
Mobile can also be converted to a sales channel. Many seniors began using mobile banking during the pandemic, if not before. But they may be using it primarily to check their balance. Financial institutions can help them take the next steps, using in-app notifications to market more complex capabilities, such as person-to-person payments or account-to-account transfers.
Security is often a barrier to using digital banking channels, especially for seniors. Targeted marketing can help seniors understand their liability for fraud losses is limited – something that's poorly understood across generations. To give consumers greater control over fraud, organizations can encourage use of mobile banking alerts and notifications, including those that ask users to confirm the authenticity of a transaction prior to approval. Tutorials and one-on-one coaching can address lingering security questions and help older consumers feel more comfortable with digital banking.
The Road Ahead
Seniors are becoming more tech-savvy, but they're not older versions of millennials. They have specific needs and expectations. Many see avoiding the branch as an absolute health necessity rather than a simple matter of convenience. They may be managing tight budgets and fixed incomes, which makes financial transparency, including real-time account balances and payment information, especially valuable.
During the pandemic, many seniors moved to digital banking for the first time, largely because they didn't feel comfortable with traditional banking options – or they weren't available. And once consumers of any age use a smartphone to deposit a check or check their balance, what are the odds they'll drive to the branch to do the same thing?
For financial institutions and the seniors they serve, there's no going back.