Hey, Personal Finance Apps: How About Serving Older People?
What online and mobile money tools do wrong and how to fix it
There’s something curious about mobile and online personal finance apps and websites, sometimes called fintech. They’re not used much by people over 50, especially low-to-moderate income older adults.
What I’d tell my fellow 50-plusers: It’s not you, it’s them — the fintech designers and marketers.
“Online banking has never been more important than it is now for older adults,” Linda Peters, director of Older Adult Programs at the Northwest Side Housing Center in Chicago, said in a digital empowerment presentation at the recent National Council on Aging (NCOA) virtual Age & Action conference. And yet, she added, there has been a “huge digital divide between older adults and banking.”
As the pandemic has temporarily closed some bank branches and made visiting open ones and ATMs a potential COVID-19 risk, however, “it’s definitely pushing some people who were previously reluctant adopters to adopt” online banking, said Thomas Kamber, executive director of Older Adults Technology Services (OATS) and a Next Avenue Influencer in Aging.
The Truth About Fintech for People Over 50
But as the nonprofit Financial Health Network’s Fintech Over 50: Designing for Low-to Moderate-Income Older Adults research report (sponsored by the AARP Foundation in collaboration with Chase) shows, fintech designers and marketers have done a pretty crummy job making their tools ideal for boomers, Gen Xers and the Silent Generation.
"The sites really are not intuitive. I’m not sure they’re designed for younger people. It’s just that younger people are used to dealing with crappy websites, so they just keep going.”
That’s especially true for the 56 million Americans over 50 with incomes under $45,000 or so, who could really use the help. According to the Financial Health Network’s researchers, only 17% of low-to-moderate-income adults over 50 are financially healthy; 57% are financially coping and 26% are financially vulnerable.
It's not as if people 50+ are tech Luddites. Most are active users of smartphones and other technology offering access to fintech solutions. Some 86% of adults in their 50s and 81% of those in their 60s have smartphones.
Older low-to-moderate-income adults, the Financial Health Network report said, “prefer to feel fully in control over their money and personal information and will be most drawn to fintech companies that put them in the driver’s seat.” They’re especially concerned about financial fraud; more than 3.5 million Americans 60+ were victims in 2017.
A Key Barrier: Fear
One reason so many older Americans still don’t deposit checks through their bank’s smartphone app: fear of what might happen if they do.
“In my experience, there’s distrust. ‘How do I know my money is going to get to you as opposed to handing my check to a teller?” said Donna Turner, chief operations officer at Zelle, a digital payments network owned by a group of major banks.
The percentage of older adults using mobile checking to deposits has been on the rise during the pandemic, though. A June 2020 SYKES survey of 1,000 people 55+ found that 18% who do use mobile checking did so for the first time due to the pandemic. And Zelle says 55% of people 55 and older are using mobile banking more frequently since the start of the pandemic.
Fear also prevents some older Americans from using personal finance apps to manage their savings and investments.
Said Kamber: “If you’re using Google Maps and you make a mistake and go down the wrong street, you go down one block. If you use your retirement savings account and accidentally put money in the wrong place, you could lose thousands of dollars.”
Kamber is somewhat annoyed by many in the fintech world.
“There seems to be a war between user design and engineering and unfortunately, engineers have won. The sites really are not intuitive,” he said. “I’m not sure they’re designed for younger people. It’s just that younger people are used to dealing with crappy websites, so they just keep going.”
What the Researchers Found Surveying People 50+
A few highlights from the Fintech Over 50 report (noted in bold), based on Financial Health Network’s focus groups with 90 low-to-moderate-income older adults, along with insights from experts about what those people said.
Many fintech solutions are designed for younger users and don’t address the needs of users over 50 properly.
“It is surprising,” said Heidi Johnson, director of behavioral economics at Financial Health Network. “The financial health needs of low-to-middle-income older adults are often serious and similar to those we all experience, with the challenges of building up short-term savings and that we might have to keep working.”
Johnson and Kamber believe it’s less about designing money management tech tools specifically for older users and more about incorporating these users in the target audience. “This population doesn’t need super-tailored products,” said Johnson. “They just need to be included in solutions.”
Even though older adults are catching up to younger generations' technology use, the stereotype of the tech-illiterate older person persists. Many of the focus group participants, the report noted, seemed to have internalized this stigma of technological ineptitude and largely identified themselves as “bad at technology.”
Kamber said he’s “seen it a million times,” adding that “older people are treated condescendingly and in dismissive ways when they’re trying to learn technology.” Then, he said, “the worst thing that happens is you don’t use the tools to manage your money and you then spend money you don’t have.”
Only a small number of the focus group participants had tried (or were aware of) more holistic digital financial management tools or more targeted offerings that could help them manage their most common financial challenges, such as insufficient short-term savings, unmanageable debt, inadequate protection from medical shocks, inability to retire fully and financial obligations.
“I hear [older] people say: ‘I got my smartphone to send pictures and share photos and for Google Maps,” said Kamber. “They don’t think of financial management as one of the core killer apps.”
Some of the focus group participants ran into challenges navigating within an application, losing their way after an inadvertent click or a transition to an unfamiliar page.
The focus group participants would sometimes respond by abandoning their task, closing an application or turning off a device just so they could find their way back to familiar territory.
“Older people want good, clean design,” said Kamber. “They’re like the Scandinavian design consumers of the internet.”
Some participants were wary of automated bill paying or account transfers, which raised fears for lower income older adults who wanted the ability to monitor and control the flow of money in and out of their accounts closely.
For many of them, the researchers said, “taking financial decisions out of their hands put them at risk of paying additional fees.”
He estimates less than 2% of fintech online products are user tested with people over 60.
And many participants expressed an aversion to fintech products specifically targeted toward older users.
Instead, they said they desired a mass-market product that meets their specific needs, without marginalizing them for their age or demographic.
8 Ways Fintech Could Better Serve Older Adults
What could help make personal finance apps and tech tools better for people 50+? The Financial Health Network researchers, Johnson and Kamber have numerous recommendations for fintech designers, including these eight:
1. Have older adults as part of your initial focus groups when designing the products and services. It’s extremely rare for the companies to do that, Kamber said. He estimates less than 2% of fintech online products are user tested with people over 60. “Maybe less than one percent,” he added.
And they have to do it in a way that’s not tokenistic, Kamber said. “That means not calling your grandmother and saying ‘What do you want?’ and then going to a business meeting and saying: ‘She wants big buttons.’” Companies instead need to invest enough energy so the information they get about older users is meaningful.
2. Use inclusive messaging, showcasing different ethnicities and backgrounds and framing aging in a positive light. Don't single out low-to-moderate-income older adults for their age, disability status or financial situation.
Said Johnson: “When older adults see themselves reflected in marketing and as potential users, they’re much more likely to be interested in trying them out.”
3. Make fees clear and tell users what the costs are upfront. Older adults with lower incomes are particularly sensitive to hidden costs and fees, the Financial Health Network researchers noted.
4. Let users test things out. “Allow pre-adoption exploration of features by offering product demos and functional mock-ups online where people can browse them,” the Financial Health Network report said.
5. Share information concerning fraud protection and data security early in the user’s experience with the product. When asking for personal information, explain why, as well as how it will be used and protected.
“Older adults who identify with historically marginalized communities, such as people of color, documented and undocumented immigrants and religious minorities often feel apprehensive when financial companies ask for personal information,” the Financial Health Network report noted.
6. Let users hit “pause” on any automatic or recurring actions with their money. Those include auto-payment of bills or auto-contributions of savings. There may be months, particularly for low-to-moderate-income older adults, when they won't have the spare cash to automatically pay a bill on a certain date or move money from checking to savings.
7. Provide navigation signposts. The more the experience is clear, as well as intuitive, the better. Otherwise, older adults may give up because they feel lost.
8. Offer human support to help users when something goes wrong and provide training that covers the full range of the content. Tutorials should include things like a key for icons in the interface; learning materials and how to easily get software updates.
To help train older adults, Zelle has partnered with Kamber’s Senior Planet program from OATS, offering people 60+ free classes about mobile banking and avoiding financial scams.
And programs like Capital One’s Ready, Set, Bank: Online Banking Made Easy can help. It works with groups like the Northwest Side Housing Center in Chicago and OATS to teach older residents how to use online and mobile banking tools.
Jamie Lutton, senior management of community development for Capital One, said at the NCOA conference that after taking its classes, “seventy-six percent of seniors were more comfortable with online banking and seventy-seven percent felt safer banking online.” But, it’s worth adding, just 29% actually signed up for online banking afterwards.
Johnson believes designers and marketers of personal finance apps and sites have a lot to gain by better serving low-to-middle-income Americans 50 and older.
“Think about including them and designing products and services for them and you will be positioned to carry forward with them well beyond the pandemic,” she said.