The number of people over the age of 50 are presently more valuable than the previous or the future generation. Financial institutions like banks and credit unions that are willing to meet the requirements of this segment will benefit from enhanced revenues while at the same time making an investment in building a gateway for the loyalty of the children of the generation over the age of 50.
Within the sector of financial services, the generation of consumers over the age of 50 is perhaps the most challenged. The numbers of these people in America alone is huge and in the region of 110 million. They are confronted with a future of complex options and have less confidence financially than any other generation. Many are preparing to begin retired life and numerous have already begun the post-employment phase of their lives. The decisions made by these people will not just affect their lives but will also have an impact on the lives of their children who at some time may be compelled to support them.
[su_quote class=”cust-pagination”]”I saw a bank that said ’24 Hour Banking’, but I don’t have that much time.” ~Steven Wright [/su_quote]
The Generation Of People Over 50 Is Under Stress
According to studies conducted this year quite a few people are not prepared for the next stage of life. The report has mentioned that these people are trying to cope with debt, making attempts to increase their savings and are concerned they will be required to scale their retirement dreams back. These people have appropriate saving patterns but are not aware of how they can begin tightening their strings. They have made a beginning with savings in traditional banking and are also open to fresh financial tools and services whenever they find that the solutions of the past do not serve their requirements or are too slow in adapting the changes that are required.
These people are using online and mobile tools regularly despite not being considered as digital natives and like all other customers, they are using the digital tools to search for financial solutions. A number of digital tools have been introduced in the recent past but most of them have not considered the requirements of these people and are only trying to attract the generation which will retire only after decades.
Massive Potential Being Neglected By Banks
The generation of consumers aged 50 and above are expected to generate $116.8 billion in 2017 which includes revenue from checking and savings accounts, consumer lending, and credit cards. The figure is expected to reach $123.7 billion by 2021.
The consumers within this segment are increasingly beginning to use financial services of the alternate type. Estimates are available they are likely to spend $15.3 billion on the alternative financial sector before the end of this year and grow at the rate of 4.25% every year until 2021.
The reasons for the shift is attributed to the fact that the legacy products which are being offered by traditional banking services are unable to meet the requirements of this particular generation. The inability on the part of bankers to satisfy the needs of the 50+ consumer is forcing them to look out for services from alternative providers that are willing to consider their needs. The initiatives of the alternative providers are also siphoning off revenue from the regularly used product categories like checking and savings accounts, credit cards and lending accounts.
It’s Time For The Banks To Wake up
Banks have for long remained stagnant on the types of services they offer and are usually reluctant to make changes unless they have been stipulated by the laws. They are concentrating on a generation which can only provide them returns after a few decades. Banks may consider this as an investment into the future at the cost of a generation which can provide massive payoffs. Therefore it can be concluded that the banking sector is neglecting a valuable customer segment.