In the argument of contactless, virtual, and online systems vs in-person methods, the latter’s main support has always been that older generations may not only struggle to understand these new methods but also desire a more personal approach. This argument, while outdated in a post-pandemic world, does still hold some merit. My 91-year-old grandmother, for example, has a flip phone with a ringtone to the tune of “When The Saints Go Marching In” and has only ever used a computer to play a round or two of solitaire. She certainly has no ability or desire to access her accounts via smartphone apps or online banking sites.
But there’s another side to this coin. My 94-year-old grandfather has the latest iPhone which he uses daily to make FaceTime calls, check the weather, and access his bank account. At 94, he’s probably at the very end of the member spectrum in terms of age, and he is always excited to discover new technology. So why aren’t credit unions marketing their new features to him? And why does the mobile app not take him into account? Because the industry falls back on the assumption that members over a certain age won’t touch their app and if they try, will not know how to use it.
Higher barriers to overcome
In this argument, however, credit unions overlook several factors. First, they severely underestimate the elderly’s ability to learn new methods and their eagerness to try new things and adopt new technology. They assume they don’t want to be invited to the table, so they’re left out completely. Because while older members may be enthusiastic about trying new systems, they face higher barriers to overcome to actually access them.
This argument also overlooks other factors that may drive older members to prefer online and mobile methods over in-person services, such as the pandemic and physical barriers. While it’s true that once upon a time older generations were devoted and loyal to their branches, we are now seeing them more than ever use digital banking. So what turned the tide? What inspired this generational shift to adopt mobile and online banking? And while we are seeing these numbers increase, how can credit unions help them overcome potential barriers and make the experience as simplified as possible for these members?
Coronavirus turns the tide
One of the big influences in the switch from in-person to digital banking has been the coronavirus. Many of the members who were once branch advocates and couldn’t imagine doing their banking online have become converts in the past few years. It’s a no-brainer that thanks to the pandemic, more users than ever have been adopting new technologies and banking methods to stay safe and keep their distance. Fintechs saw growth of over 100% and according to research conducted by BAI in August 2020, half of consumers are using digital products more since the pandemic, and 87 percent of them are planning to continue this increased usage after the pandemic. Those over 65 were not immune to this shift in preference.
Especially as senior citizens faced an increased risk with the pandemic, they were even more cautious than most in venturing out. This meant that even if they were one of the members who could not imagine not going to their favorite teller once a week to do their banking, they were left with little choice.
According to a survey conducted by Lightico in July 0f 2020, 100% of consumers aged 66-75 completed an online financial interaction in the last three to six months while only 93% of 18- to 39-year-olds had done so. 93% and 100% may not be a substantial gap, but it should convey that your older members are even more likely to be using your mobile app and online site more than anyone.
Some older members can’t access a branch
The assumption that those over a certain age won’t use online banking methods also fails to take into account those who may be unable to go to a branch to get their banking done. Health issues and lack of transportation may prevent those over a certain age from journeying into a branch, even if it is what they prefer.
Let’s jump back to my grandparents as an example. Sure, my grandpa can check his bank accounts via the app and has gotten pretty efficient in doing so, but he struggles to do much beyond that. And with no car or driver’s license, his finances are often left to others. His son manages his accounts virtually from Colorado and his daughter has his accounts linked to his favorite online stores so he can shop easily and uses his account to order groceries to his door. 100% of his banking is done virtually. So even if an older member personally does prefer doing their banking in person, it’s important to remember they might not be the one managing their finances.
Education is key
So, now that we’ve covered some of the reasons we are seeing a switch to digital banking in older generations, let’s cover some of the barriers they face in the digital world and how credit unions can help lower these barriers.
First and foremost, the largest barrier facing the adoption of mobile banking is education. Many of these members have never used digital banking technology before and while it may seem like second nature to younger generations, it may take more time for them to become accustomed to how it all works.
As David Damstra mentions in his article on credit union websites, regular internet users are familiar with what we call website design “idioms,” meaning they have an understood knowledge that enables them to know where to find what they are looking for on any given page. They know to look in the header for main information, that three lines in the top right indicate a menu to expand, and so on.
Users who are just taking their first steps into online banking are not familiar with these idioms. A certain level of education and familiarization through repeated use must occur before they can use the site with the same ease most users do.
However, there is very little effort on the part of the financial institution to make this education happen, as they focus on appealing to younger, tech-savvy generations. Financial institutions will spend countless dollars trying to figure out the secret to making Gen Z think their mobile app is cooler than the rest, but little on bringing senior citizens into the fold. Financial institutions write them off as branch-only members and move on.
To test this theory, I reviewed six sites of local credit unions to see how easily they supplied information on using their mobile app or getting general education information. The first site I looked at, to my surprise, had a large “education” tab right in their header menu. It was easy to read, easy to find, and clicking on it gave me access to their video tutorials and more. The downside was that instead of having a list of their videos or articles, they required you to search for a specific term, so new users would be unable to simply browse, and many members may not be aware of what they want to search for.
This was still much better than the remaining sites. Two others had education sections on their websites, but these were buried under menus with numerous other options (so many that even I was overwhelmed), in small text, and required going through multiple pages to find my final destination. Neither of them offered anything on using their website or mobile app and only one of those two offered general information online, the other simply asked you to make an in-branch appointment, defeating the purpose. Finally, the last three had no education section at all on their site. This means that out of six, only one credit union had easily accessible education and tutorials for new users.
Should the member overcome the first barrier and educate themselves on the app or get help from someone else, they are faced with situations they are unaccustomed to in the app. There are more accessibility issues at play. Mobile apps and sites will often redirect the member to a different page and any given user could be bounced from their accounts page to an FAQ page to a rewards page in a matter of seconds. It happens to me nearly every time I try to do more than check my balances, and even as a younger millennial, I’m often confused about how I ended up on a certain page and struggle to figure out where the answer to my question was.
According to Forbes, 62% of middle-income banking customers have been redirected to a physical bank branch during an online banking task and another 54% have been asked to print, sign, or email documents while banking online. For older members just taking the first steps to going digital, these bounces can completely throw them off and make them unsure. Furthermore, many of these redirects require other technology or a trip to the branch, which as mentioned before, isn’t feasible for all and negates the purpose of digital banking.
Take a look at your mobile app and online banking through a new lens and consider how easy or difficult the required steps would be for someone completely new to the experience and how you can simplify the process. Does your mobile app allow for Face-ID or fingerprint login to prevent the member from needing to type in a password? How long do your online sessions last? If a member was to try to find any information they keep in physical documents or folders or need assistance, would they come back to find they had to log in all over again?
Try completing simple transactions or looking for answers to questions members might have through this lens. How many pages do you need to go through to get there? How many steps, clicks, redirects, or password inputs do you require? How are you testing your digital banking methods for user-friendliness?
Cybersecurity and other concerns
Aside from education and ease-of-use barriers, data shows that older generations taking on virtual banking also have more cybersecurity concerns than younger members. According to Lightico, 10% of senior citizen bankers don’t feel online transactions are secure while an even larger portion see them as “somewhat secure” and when asked to rank their top concerns regarding online security, the majority fear financial loss first (52%) and loss of privacy second (42%).
Senior citizens in general are bigger targets for scams than other demographics. In fact, the Consumer Financial Protection Bureau reports that over 3.5 million adults 60 and older were victims of financial fraud in 2017. Therefore, it’s probable that as larger targets, they have become more cautious, especially since many live on a fixed income. Also, whereas younger generations have grown up with this technology and are very comfortable with it after years of experience, older members are trying something potentially brand new to them with no experience. It’s understandable they would be more hesitant to trust that digital methods are as secure as what they’re used to.
How are you reassuring your members that you are protecting their data and finances?
Not going back
The fact of the matter is, even if there remains a group that has yet to turn to online banking and prefers to do their banking in person, there is a much larger group who is eager to use these new methods and who may even require them. Your online banking needs to be as accessible and easy to use for them as it is for anyone else, and you should be marketing and considering them in decisions as much as any other group.
Drawing a hard line on members over a certain age and crossing them off for online and virtual banking relies on outdated assumptions and statistics and fails to take into account the aftermath of the pandemic and situations in which the elderly may be unable to go to a branch. Failing to design your site and app with them in mind because you’ve written them off for anything other than branch business will hurt you and the member in the long run. Make sure your members know that all your resources are available to them, regardless of age, and you’re here to help them every step of the way.