Senior Citizens Get Support From Financial Technology
(Bloomberg Businessweek) -- When Betty McKennon, 83, needs to deposit a check, she walks down the hall of her retirement complex in Freehold, N.J., to the OceanFirst machine. It looks similar to an ATM, but if she needs assistance, she presses a button to start a video chat. Kevin Williams pops up on the screen to assist. He’s at his desk 30 miles away in Toms River, N.J., but McKennon knows him by name. He’s her neighborhood teller, even though they’ve never met in person.
McKennon has a computer and a Kindle Fire, but technology can still be a challenge. “The ATM I used for the first time, that was pretty easy,” she says. “But I told my friend, ‘You stand here and tell me what to do.’” With the video teller, Kevin can walk her through the process. Users can do almost everything they can at a normal bank branch—deposit and cash checks, make transfers between accounts, or pay a mortgage for a vacation home.
Financial technology is often focused on the needs of millennials. Banks and payment companies are pushing mobile apps and online platforms to accommodate the tech-savvy, who want to be able to pay bills from their phone or quickly send money to friends. A few companies are finding ways to use tech to help a fast-growing demographic: the elderly.
OceanFirst Bank’s effort is a relatively small one that illustrates some of the needs technology could help address. McKennon’s retirement community, Applewood, had a store, restaurant, salon, and pool, but no bank. It contacted OceanFirst in 2014 about the possibility of setting up a minibranch. The bank decided that didn’t make financial sense, but other banks including Bank of America Corp. were experimenting with video teller machines. OceanFirst reasoned that could work for residents in a retirement home. “We were astounded by how quickly they took to the technology,’’ says Chief Executive Officer Christopher Maher. “You’d think the adoption of technology might be a stretch, but being able to not need a card or anything, just press a button and talk to someone, is something they’ve adopted very strongly.’’
Today, OceanFirst has three video teller machines in retirement homes and several more in other locations. They’re using them instead of bank branches in some areas. McKennon, who uses a walker strung with peachy-pink faux flowers, likes that it spares her a car trip just to go to the bank. “And one thing I don’t have to do is stand in line,” she says. “I found that to be a real issue.’’
Many seniors are well set up to use digital financial services. A 2017 Pew Research Center study found that 67 percent of people over the age of 65 use the internet and 80 percent have a cellphone. Younger seniors—those who’ve recently retired—have generally been using digital technology for decades. Still, overall “seniors’ experience with technology is really different than what other demographics are having,” says Tom Kamber, founder and executive director of Older Adults Technology Services. His group worked with Capital One Financial Corp. to create “Ready, Set, Bank,” a series of short online videos aimed at teaching seniors the basics of digital banking.
Online banking can be a simple way to lower some of the physical barriers that may come with age. But older people who suffer from memory loss have different needs. For them, tech can be a way to help their family members or guardians protect them while allowing them some independent control of their money. True Link Financial is an online financial-services company designed specifically for retirees and people who act as caretakers for seniors and other adults. One of its services is a prepaid Visa card with access controls. A family member can fund the card, get text alerts about card activity, and manage online how it’s used, including blocking purchases over the phone or from certain stores or categories of spending.
Controlled cards can be one step in preventing scammers who target the elderly. They can also help families manage complex situations, says Kai Stinchcombe, CEO of True Link. For example, a person might have one child managing the money, another providing financial support, and an in-home caregiver who buys groceries but doesn’t go to the bank to get everyday cash. In some cases, “you should be able to go out for pizza and to the movies but not make wire transfers for investment opportunities to the Bahamas,” Stinchcombe says.
True Link charges $10 a month for its card. There are lots of other prepaid cards, and some have lower monthly fees and allow people to set up accounts for family members and set spending limits. Stinchcombe says these aren’t specifically designed around the needs of seniors and their families. Other cards are often marketed to people who don’t use banks, or to families with teenagers or college students.
But as more Americans move into old age, expect more businesses to be pitched to the needs of seniors. By dint of a lifetime of savings, people over 65 typically have a higher net worth than others. “You would think there would be a big focus on older folks, but there isn’t,” says Liz Loewy, co-founder and chief operating officer of EverSafe, a subscription service that analyzes bank accounts and credit card use to look for unusual activity. It can alert the account holder and family members or other trusted people. “I think that fintech and aging should be a natural combination,” she says. “I'm actually waiting for more folks out there in fintech to focus on this.”
©2018 Bloomberg L.P.