Currently, the digitization of financial services is an advanced and irreversible process. Seniors are on the verge of a digital revolution that encompasses their financial assets, entrusted to financial institutions. It's worth finding answers to questions on many levels, such as how seniors currently navigate the digitization of financial services, whether they have access to traditional and modern services, and how they accept these services.
Why is this topic important and does the study fill a knowledge gap?
Seniors are a rapidly growing demographic group. According to the Central Statistical Office, in 2019, the Polish population numbered 38.38 million, of which 25.31 TP3T were people aged 60 and over. By 2050, the percentage of people aged 60 and over will be 40.41 TP3T (GUS, 2021a). It is also important that seniors are a group with stable income from pensions and often significant savings.
Researchers Dr. Sylwia Badowska and Dr. Anna Golec decided to examine the needs of this diverse community regarding the use of digital financial services. The recently published report "Digital Financial Services and Seniors," signed by SeniorHub.Institute of Senior Policy (www.seniorhub.pl), CFA Society Poland, the Warsaw Institute of Banking and the Chamber of Fund and Asset Managers, offers valuable information on how to make it easier for seniors to use digital services and tools offered by financial institutions.
It turns out that among seniors with acquired digital skills, the majority are keeping up with technological changes, but the demand for digital financial management tools in this group may increase significantly. Several hundred thousand consumers aged 60+ are still afraid to use or are unable to navigate applications and services. Meanwhile, the number of seniors who are still "non-digital" and distrustful of the internet amounts to as many as 6 million, many of whom can be convinced to enter the digital world through education—primarily by demonstrating the real benefits that using the internet can bring in various areas.
What do digital seniors do with money using digital tools?
As many as 87% respondents aged 60+, both digital and non-digital, use the services of financial institutions, of which 62% respondents use the services of more than one financial institution. As many as 91% "digital" seniors use the services of online financial institutions, while nearly 9%, for various reasons, still do not use them, even though they use online tools.
The degree to which digital financial products meet the needs of seniors
Digital products designed with younger users in mind pose significant challenges for many people aged 60 and over. Only 33% of those aged 60 and over believe that financial institutions' digital offerings are adequately tailored to their needs. As many as 42% of seniors have a neutral opinion of this offering. It's possible that some elements of this offering are incomprehensible to people aged 60 or 70 and over (e.g., imprecise offer descriptions or overly complex contracts), as are some of the functionalities of the financial management tools available to customers (in apps or services). However, it's difficult to call this a permanent barrier.
Among "non-digital" seniors, 53% indicate that digital financial services are difficult and time-consuming to use. 57% of them believe that using digital financial services brings no benefits. These concerns and limitations stem from a lack of real computer experience. This lack of experience leads to a lack of natural demand for using these tools and supports the attitude of dismissing them as "difficult," "time-consuming," or "risky.".
The solution is certainly education. And it's the traditional, mostly face-to-face, less digital kind.
Seniors need someone to explain the offers and functionalities of the tools. What seniors lack most in current financial institutions is dedicated training, which would provide them with a detailed understanding of the offers and risks, as well as teach them how to properly use digital tools for asset management. When using digital financial services, one of the most important sources of assistance for seniors is financial institution employees, with whom contact should be face-to-face or via teleconsultation.
Seniors' lack of use of digital financial services stems much more from the respondents' beliefs and perceptions about these services than from their actual, personal negative experiences. Factors that can overcome the limitations perceived by seniors should primarily focus on access to support and building positive personal experiences using new solutions. First, it involves ensuring access to people who can explain the use of these solutions to seniors and support them in acquiring the knowledge and skills in this area. Second, it involves providing seniors with personalized, positive new experiences using these solutions and encouraging them to believe that it is much easier than they think, according to Dr. Sylwia Badowska and Dr. Anna Golec.
Seniors lack training on how more complex financial products work and how to make informed financial decisions. This is a very important conclusion, but above all, it's a recommendation for financial institutions, which, if implemented, can strengthen trust in banks, for example. Research indicates that seniors have a great deal of trust in financial institutions and are the first port of call for help – Michał Polak, Vice President of the Warsaw Institute of Banking Foundation.
Download the report HERE
