An article in the Credit Union Times warned banks and credit unions not to put an “overzealous focus” on Millennials, citing an AARP study which said:
“Financial services has seen no shortage of breathless enthusiasm for the millennial generation, with banks and startups clamoring to be the first to understand and serve the needs of young ‘digital natives’ and ‘the mobile-first generation. But what about the rest of Americans?”
Too funny. I guess it was just a matter of time before we Boomers got tired of all the attention being paid to Gen Whine.
And speaking of “breathless,” the cited AARP report includes a breathless array of stats in an attempt to paint a picture of a generation in need of financial services resulting from the need to deal with the burden of student loans, rising healthcare costs, and the need to save for retirement, among other factors.
Despite the statistics, there’s one key factor missing in the report — and in most discussions about Baby Boomers’ banking needs that occur in banks and credit unions (if those discussions happen at all) — that will define an increasingly dominating financial need among aging Boomers: fraud protection.
Fraud(ish) Protection: A Full-time Job
A friend of mine (a younger Boomer in her mid-50s) tells me about her efforts to help her parents (in their mid-80s) manage their finances.
Technically speaking, a lot of what she’s dealing with isn’t fraudulent behavior on the part of financial institutions and other financial providers — it’s borderline illegal, solidly unethical, and most definitely not in the best interest of her parents.
She’s had to unwind insurance policies with ridiculous levels of coverage, investment accounts socking her parents with inactivity fees, and merchant credit card accounts with compounding late fees because some bills did not get paid.
Calling around to the various providers is practically a full-time job. And it isn’t made any easier by the fact that she isn’t the account holder. And it’s all made even harder by her parents’ resistance to her efforts to help.
This isn’t a problem of financial illiteracy. We’re talking about a couple of very intelligent and successful people here. But we’re also talking about a couple of aging people.
It’s Only Going to Get Worse
The proliferation and adoption of digital tools by Baby Boomers — even though lower than younger generations — is going to facilitate fraudulent and unethical behavior among predatory financial providers over the next 20 years.
It’s a numbers game. According to the Pew Research Center, from 2011 through 2030, roughly 10,000 Baby Boomers turn 65 every day. That’s a lot of people in their 80s starting in 2026, and going through 2045.
Saving for and having enough money in retirement will certainly be a need — but that’s not a new need. Dealing with escalating healthcare costs will certainly be a need, but again, not a new one.
What makes Baby Boomers a new emerging segment of the banking population will be their need for new digital banking services that:
- Guard against unethical and fraudulent behavior
- Provide permissioned account access to family and trusted advisors (with controls on top of that)
- Link to and integrate with estate planning wishes (that haven’t typically been digitized)
Boomers: The New Emerging Banking Segment
On one hand, I disagree with the warning about “overzealous focus on Millennials.” This generation is the dominant segment driving demand for financial services today. But they’re no longer an emerging segment.
That distinction belongs to Baby Boomers.