Fintech is a broad term that applies to a wide range of products, though, in general, it refers to tech-based alternatives to traditional financial services. Everything from Venmo to your preferred mobile banking app qualifies as fintech.
With that in mind, it’s logical to assume that these products are more appealing to millennials and Generation Y. After all, they’re much more likely than older adults to embrace these innovations, right?
Not exactly. While younger consumers may have ushered in the fintech revolution, they are not the only ones who stand to benefit from tech-based alternatives to major financial services. There are many reasons why members of older generations are also ideal target customers. The following are a few key reasons why:
Seniors may be intimidated by new technology, which requires some familiarity with design and form factors that are often foreign to them. This can prevent them from taking full advantage of emerging financial technologies. Even using an advanced ATM may seem challenging for some.
Luckily, technology can (perhaps ironically) help seniors become more comfortable using new, innovative tools.
An example would be a special ATM currently in use at a New Jersey retirement complex. It incorporates a video system that elderly customers can use to contact a human teller if they are unsure of how to perform a certain task. Instead of removing tech features from the ATM to make it more senior friendly, the creators realized they could actually use technology to make their ATM more accessible.
This illustrates an important point. Seniors may struggle with managing their finances when they don’t understand how to use new devices and services. But with fintech solutions, it’s possible to guide them through essential processes, empowering them to handle their money on their own.
Providing for Retirement
Robo-advisers (fintech-based financial advising services) were initially marketed strictly to millennials as industry experts believed older adults might be reluctant to embrace this technology. However, these experts have now adopted a different perspective.
As baby boomers grow closer to retirement, they are finding a greater need for easily accessible financial advisers. They also have more capital to invest. And while improved medical care has resulted in retirees living longer than previous generations, today’s retirement savings plans often don’t reflect the increase in life expectancy. Boomers need to find ways to ensure the money they have saved lasts longer than what their retirement plan recommends.
Fortunately, robo-advisers are helping older adults with crucial tasks such as managing retirement income and estate planning. They can make staying financially healthy during retirement much easier than expected.
Cognitive abilities often decline as a person gets older. Thus, it’s not uncommon for seniors to forget when they have to pay certain bills.
Forgetting to pay a bill can have a negative impact on anyone’s personal finances, but depending on the nature of the bill, not paying it on time can potentially threaten a person’s safety as well. An elderly person who neglects their electric bill may find themselves without heat in the middle of winter, for instance.
This is yet another problem fintech can solve. Currently, fintech-based services allow seniors to link all their bills to an online account, which is itself linked to a bank account. Every month, the bills are paid automatically.
Once a user sets up their account, they typically don’t need to access it again to keep using it. The automatic nature of the system ensures no active maintenance is required. This may be ideal for seniors who do not spend enough time online to actively use this kind of product.
Similar products also use technology to monitor a senior’s typical spending habits. This helps guard against scams. If the system identifies a suspicious transaction, it will alert the user. Because scammers often target elderly people, these tools can be very helpful. They may also relieve some of the burden experienced by family members who feel responsible for helping elderly loved ones manage their finances.
These are merely a few examples illustrating the value that fintech products can offer older adults. The older someone gets, the more difficult it can become to manage personal finances. It’s clear that fintech has the potential to solve this problem effectively.