There’s no denying that the COVID-19 pandemic has accelerated the adoption of mobile and online banking faster than anyone could have anticipated. An unprecedented number of people have had to move to digital channels either because they had no choice or chose not to bank in person even if they could.
Numerous studies have attested to this. One example: Fidelity National Information Services (FIS) reported a 200% jump in new mobile banking registrations in April of 2020 when pandemic-related lockdowns were widespread. Additionally, as of July 2020, 14.2 million Americans — 6% of U.S. adults with a checking account — had selected a digital-only bank to be their primary account holder, according to Cornerstone Advisors. That’s a 67% jump from January 2020.
Missing Out on a Obvious Opportunity
In the rush to meet customer needs, the digitization efforts of financial institutions have understandably centered on creating mobile app experiences that resonate with the Gen Z and Millennial generations. These large and growing customer bases are, after all, tech savvy and more likely to adopt digital banking. They also expect frictionless, personalized and secure experiences of a certain quality, and have no compunction in changing banks if they feel their needs are not being met, processes are too lengthy or there’s another bank with far cooler tech.
But, as important as these large younger generations are for banking business — especially future business — there remain large numbers of older consumers, many of them long-time customers of banks and credit unions. Yet it seems that during this focused and rapid transformation to digital banking, this important customer base has been overlooked.
Before the pandemic required us to embrace all things digital, many among the older generation of consumers were reluctant to make the change. The reasons for this have long been attributed to fear, mistrust, a perceived lack of their own technical ability or a preference to speak to an actual person. Whether those reasons were valid or not, the events of the past six months have forced the hand of older generations. A study by Zelle showed that since the start of the pandemic, 82% of seniors are banking online more frequently, and 55% are using mobile banking more often.
Don’t Typecast People by Generation
At a time when it’s never been more important to understand the attitudes, behaviors and needs of your consumers, financial institutions should avoid trusting too much in the stereotypes of each demographic. These perceived notions may be true in some instances, but not always. Not all older consumers are uncomfortable using digital technology. Over the years, more older adults than ever have adopted smartphones, 90% of people in the 55–75-year-old range are active on Facebook, and three-quarters of internet-using “seniors” go online every day. And, since the pandemic, increasing numbers of adults aged 65 and older are using Zoom and other videoconferencing tools to connect with family and friends. With this in mind, can we continue to assume that older consumers are not willing to at least try digital banking?
By concentrating only on younger consumers, banks and credit unions could potentially miss out on a golden opportunity to grow their base of digital newcomers by expanding their digital offerings to cater to older customers’ more complex financial services needs and address their concerns.
For some among the older demographics certain factors outweigh the benefits and convenience of digital banking services. A lack of confidence in security (30%) is a significant hurdle. Unfortunately, this fear is understandable. Scammers’ techniques are becoming increasingly sophisticated as new channels through which to bank are made available, and their “success stories” seem to be in the headlines almost daily.
Usability problems (20%) and a lack of trust in their own ability add to older consumers’ reticence in adopting digital channels. They may have tried using online banking channels, but found them too difficult to navigate and the fear of making an expensive error caused them to simply abandon the process. During this time when personal interaction is limited, and beyond, banks and credit unions should give thought to instilling confidence in all their consumers when banking digitally, whatever the reason.
Great UX No Matter What the Age of the User
Ease, efficiency and speed are key to a great user experience for consumers of any demographic. A digital-first solution provides a logical and simply designed path to follow with, for example, icons and personalization options, so a user can tailor their journey to their needs and preferences. Frequently used services that help solve problems — such as quick balance checks and transaction filters — should be upfront and intuitive to navigate
Simplifying payments is another way to improve ease of use, especially since depositing checks remotely has become much more common. With multiple options to choose from, consumers expect the safest and most convenient ways to pay to be available, all in one place with a consistent user experience. They don’t want to know about the technicalities; they just want it to work.
Central to making consumers feel safer is trust — often a complex undertaking when trying to deliver simple, intuitive user experience. The good news is that security and convenience are not mutually exclusive if solutions are built with the user front of mind.
As an example, a 2017 study in which we participated found widespread demand for greater mobile banking authentication controls, not only for when consumers log into their accounts, but also for almost every type of mobile banking transaction there is. The consumers surveyed believed that having more authentication control would make them feel safer, and also improve ease of use.
Omnichannel Experience Needed More Now
In order to stay relevant, banks and credit unions will need to rethink their digital transformation journey so that it meets the needs of older generations, but without alienating their younger client base. Though many consumers have embraced digital banking having now tried it, it’s likely that some portion will want to return to using other channels — both younger and older consumers in some cases.
A good place to focus would be an true omnichannel experience that allows customers to switch seamlessly between channels, so they can start a transaction online and conclude it through the call center, for example, if that’s what they prefer. Even as social distancing restrictions are lifted, customers should be able to schedule virtual appointments with a personal banker if they need advice for complex processes such as applying for a mortgage or saving for retirement.
By offering smarter, more relevant services, and providing support and advice so customers can interact how and when they want, a bank or credit union can ease the progression to this digital lifestyle and empower customers of all ages to bank with confidence.