We constantly hear about how important it is for businesses to reach out to young consumers. Millennials are about to surpass Baby Boomers as the largest generation and they’re already the largest generation in the U.S. labor force, according to Pew Research Center. Many of them are digital natives (including practically all Gen Zers), and they’re forcing companies to reexamine the way they do business in the digital era.
Clearly no financial institution can ignore this vital market segment.
But with all the focus on young consumers, banks and credit unions risk ignoring — or worse, alienating — tens of millions of Americans who are 50 and older. Baby Boomers are still the biggest spenders in the U.S. economy. With longevity increasing, Boomers will control a disproportionate share of the country’s wealth for some time. Older Americans have unique needs and priorities when it comes to managing that wealth, and the financial services they use have to reflect that fact.
Still, the last thing financial marketers should do is present a false dichotomy between older and younger consumers. In many ways, the generations are more similar than you may think. For example, rates of social media adoption have been steadily increasing among Americans 50 and older; 42% of Americans over 65 have a smartphone (up from 11% in 2011) and 32% have a tablet, Pew notes. Others, however, remain offline: one-third say they never use the internet and half don’t have home broadband.
Opportunity to Help Out With Digital Adoption
That distinction raises the important point that no generation — including Millennials and Gen Z — is homogeneous. So it’s vital to treat people as individuals. Some Boomers are perfectly comfortable with mobile banking or navigating your website, while others need personalized assistance. And some older consumers may not be willing or able to use digital tools at all, even though they may also struggle to travel to a branch.
Some institutions, including Italy-based UniCredit, have trained staffers to visit older consumers at their homes. But this isn’t the norm: Less than one-fifth of banking providers offer courier or messenger service for older customers that cannot physically come into the branch, according to the American Bankers Association Foundation.
While digital aptitudes vary widely among Boomers, banks and credit unions should offer clear instruction on how to use their digital services. They should also seek consistent feedback on the user friendliness of those services and recognize that some older consumers lack even a basic understanding of how to use them. As Pew Research reports, more than one-third of seniors say they have “little to no confidence in their ability to use electronic devices to perform online tasks.” And ABA points out that just 22% of Boomers use mobile banking.
Fraud Prevention Should Be Key Focus
Giving older consumers personalized service isn’t just a matter of ensuring that they have access to your institution’s digital and physical resources — it’s also crucial to fully understand their unique banking needs.
According to the ABA, people over 50 hold 70% of the deposit balances in the United States. But less than a quarter of banking providers offer any additional customer services for that age segment. Seniors are prime targets for fraudulent investments and other financial scams and one-fifth of them report that they have been victims of financial abuse.
A 2018 survey conducted by Wells Fargo found that 90% of seniors have received phone calls, sales pitches, or emails they thought were scams. These are all reasons why credit unions and banks should offer education programs and hold community events that teach older consumers how they can avoid becoming victims. They should also train staff in fraud detection and teach them how to communicate both the risks and preventative measures to Boomer customers.
Despite the risk of fraud, the Wells Fargo survey also found that 70% of older consumers want to control their money, even if they make mistakes. And more than half consider planning for the future a very important area of their lives.
Seven Ideas for Financial Marketers to Act On
Even though Boomers hold more wealth than any other generation and have their own distinctive set of banking needs, many credit unions and banks fail to implement programs and services specifically designed for older consumers. Here are a few concrete ways to meet their needs:
1. Survey older consumers about their experiences, pain points and attitudes. This won’t just remind them that their feedback is valued and their concerns are top of mind — it will provide actionable data about how to improve their customer journey, develop targeted products and services, and engage with them across platforms.
2. Provide human-to-human services and experiences. Although Boomers have adapted to a digital world to varying degrees, many still prefer to interact with a real human being whenever possible. The option to engage directly with another person should always be available to them.
3. Be flexible with financial education. Digital resources may be convenient for some Boomers, but many prefer reading material they can take home with them. It’s essential to ensure that they receive educational resources that are every bit as comprehensive and accessible as their digital counterparts.
4. Develop targeted loyalty programs. These can include rewards for travel-related spending and incentives that help Boomers stretch their retirement accounts as far as possible.
5. Be sure employees understand how to interact with older consumers. Branch and contact center staff should be trained to recognize that older consumers have unique financial needs and ambitions. Employees should also be equipped to help older consumers reach their financial goals. This means presenting information in a thorough and digestible way, patiently answering any questions they may have, and knowing how to direct them to all available resources.
6. Communicate in the manner people prefer. Financial documents have to be available in accessible formats. Information about consumers’ account status and available services should be immediately available on multiple channels (online, phone, branch, etc.), and all other materials should speak to their interests and concerns.
7. Above all, treat older consumers with respect. Never make assumptions about their financial goals. Employees should listen attentively and do everything possible to help consumers (regardless of age) accomplish those goals. When seniors have questions, they should be answered promptly and carefully. And financial institutions should always be looking for ways to make the banking experience smoother and more rewarding for older consumers. Not only Millennials appreciate friction-free banking.
And, this brings us back to the central point: Older consumers, whether Baby Boomers or older, must be treated as individuals with their own aspirations and concerns. Contrary to common stereotypes, older people crave the rich and dynamic experiences that they’ve earned from years of hard work: from starting a new business to traveling the world. Banks and credit unions are uniquely placed to be their financial partners, helping them do whatever they want as safely and sustainably as possible.