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Older bank customers are often neglected digitally

I.n the pandemic, many older bank customers are facing a problem. As members of a risk group, they are often afraid to go to the branch, at the same time they are still too unfamiliar with the Internet or smartphone apps to use online banking or mobile banking as a substitute for the usual visit to the branch employee. In the opinion of the management consultant Agnieszka Walorska, however, the financial sector fails to specifically address older customers. This applies to both young neo-banks and traditional credit institutions.

Walorska is co-founder of the digital strategy agency Creative Construction, which has been part of the banking consultancy Capco since the takeover in March. “Older bank customers aged 65 and over are hardest hit by the Corona crisis and the closure of branches because they have reservations about digital technology,” says Walorska. However, this is also due to the providers, who are hardly able to accommodate the older target group on the digital route. The young customers in particular are hotly contested, as they are easier to move to change banks and are considered to be the users of the future.

“With older customers, the banking industry is neglecting the target group, of all things, whose market share is gaining in importance in view of the demographic development,” says Walorska. According to the data for the past year, only 21 percent of people who are 65 years of age or older used online banking and only 5 percent of them used mobile banking with apps for their smartphones.

When the grandchildren give digital tutoring

But the older target group is fundamentally open to digital services if they are introduced to them. Younger relatives usually help. Grandma often “inherits” the discarded smartphone or tablet from, for example, the grandson, who is already looking at the newer model. In this way, Whatsapp, Youtube or Internet news would have become more and more popular among older users.

In the case of digital banking services, on the other hand, according to management consultant Walorska, higher hurdles have to be overcome from the perspective of the provider, since the use of passwords and the cumbersome two-factor authentication cause problems for older users. In addition, many distrusted security, which becomes a particular inhibition threshold when it comes to money. The small preset font size of online banking or apps is often a problem for customers over the age of 60.

According to Walorska, banks could help their older customers get started with digital channels, for example by having employees available on the phone or connecting to their computers online if questions about usage need to be answered. Banks could also score particularly well with older customers when it comes to security. The automatic information about incoming payments and payouts is an advantage of digital banking, which gives account holders an overview of their financial situation or in the event of unwanted cash outflows, for example through subscription traps aimed at seniors, could quickly trigger an alarm.

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