Seniors Demand … Digital Banking

Seven months into the COVID-19 pandemic, we know a lot more about the virus we're fighting. We know this is going to be a long fight, and that life has changed dramatically and is unlikely to return to the way it was. Even as lockdown measures are relaxing across the country, seniors, who are at higher risk for serious illness or death from the disease, are not rushing out into crowded places any time soon.

This means that the traditionally less digital demographic not only needs access to digital banking but, as we'll see, is quite ready for it – both for its convenience and safety in today's environment. With potentially greater wealth and a greater willingness to try out new technology than ever before, credit unions have a unique opportunity and even obligation to connect their oldest members. Let's look at some of the challenges and opportunities associated with online banking for seniors.

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The Time Is Ripe for Seniors to Bank Online

There's a common stereotype of older people as technophobes – eschewing the conveniences of technology in favor of pen-and-paper or face-to-face interactions. Yet the coronavirus has brought about shifts in consumer habits, and seniors are more comfortable with online transactions than ever before. Underlying these changes is the reality that eight out of 10 COVID-19 deaths occur among adults over the age of 65, according to the CDC. The stakes are high enough that seniors are willing to step outside their comfort zone to avoid the dangerous virus.

This means there is an unprecedented opportunity for credit unions to adopt technological and educational tools that are geared toward bringing seniors online.

But it's not just the coronavirus that makes online banking a potentially ideal fit for seniors. Older Americans, especially those with mobility problems, greatly benefit from being able to conduct banking activities from the comfort of their own homes. Unlike traditional banks, credit unions frequently have limited numbers of physical branches. Driving across (or to another) town or getting on crowded public transportation to get to physical branches can be challenging for anyone – but adds particular discomfort to seniors' lives.

In addition, most seniors already have access to the channels they need to start banking online. Pew Research showed that 81% of banking customers over the age of 65 (whose annual household income is over $75,000 annually) own smartphones. Implementing senior-friendly digital banking technology will encourage seniors to start using their smartphones to access financial services.

A Critical Barrier: Security & Ease-of-Use Fears

Given continued fears of coronavirus transmission, accessibility issues related to visiting a physical branch and the widespread adoption of smartphones among seniors, offering a more effortless and secure online banking experience is key.

The Finance Foundation found that the main reason seniors often avoid online banking was that they "want people, not machines" (86%). Other reasons included fear of making mistakes or concerns about fraud.

Another study conducted by Lightico found that seniors are more than twice as likely as consumers 64 and under to feel that online transactions aren't secure.

These concerns – about lack of human input, security and mistakes – are understandable and need to be urgently addressed by credit unions who are serious about digitally serving all age groups. Consider the following realities that differentiate senior citizen experiences:

Greater familiarity with face-to-face transactions for most of their daily activities, including banking;
Physical issues, such as stiff fingers or poor eyesight, that make them worried about having to perform a digital task quickly or increase the likelihood of making mistakes;
The knowledge that they are more vulnerable to online fraud due to perceived and actual vulnerability; and
Complex and unfamiliar access procedures, such as mandatory difficult-to-remember passwords, SSO, frequent security checks and automatic session logouts (31% of online transactions with access issues are lost to abandonment, switching providers or ignoring them).

Without addressing these very real issues, credit unions will miss an opportunity to offer a key consumer demographic the benefits – to both users and institutions – that online banking offers.

The Key to Attracting Seniors: Secure, User-Friendly Technology

Ensuring that online banking is accessible and appealing to all demographics, not just millennials is a worthwhile goal. Credit unions stand to improve their member satisfaction rates, cut costs and improve efficiencies by ensuring their online offerings serve everyone well.

Here are some immediate steps credit unions can start taking to increase the likelihood of their senior citizen members turning to digital banking:

Producing and sharing easy-to-follow digital banking lessons and videos, including tutorials and how-tos for common services;
Adding more seamless access options, such as biometric fingerprints and facial recognition, instead of cumbersome passwords;
Embedding more seamless security verification options, such as automatic photo ID and digital signatures; and
Offering on-phone agent guidance so that seniors can receive clear and patient guidance at a distance as they complete digital forms or processes.

Mark Murray, the vice president and business systems liaison at regional Happy State Bank, started implementing more intuitive and secure technologies right at the beginning of the coronavirus pandemic.

He later reflected, "We were relieved and delighted when seniors actually expressed their preference for the simplicity of this technology [over physical paperwork], which doesn't require any particular technical know-how on the part of the end-user."

Like regional banks, credit unions can win over the hearts and minds of seniors through scalable yet human-centric technology.

Digital Banking: Personal, Streamlined & Secure

Credit unions are famous for their personalized service, which jibes well with senior citizens' expectations of human, high-touch service. Digital banking may at first seem antithetical to these expectations, but that is no longer the case.

The latest technology, combined with senior-focused member education, can allow credit unions to bring all demographics, including seniors, online. Many digital solutions are built to enhance agent-to-consumer communication (and vice versa) rather than replace it, making online banking a viable choice for older Americans.