Three ways to retain and acquire aging customers
As banks focus on attracting millennials, they also need to make sure they’re delivering the products and services older customers want.
As banks focus on attracting millennials, they also need to make sure they’re delivering the products and services older customers want.
Millennials seem to be the main concern of banks. For example, Roberto Mancone, managing director and global head of disruptive technologies and solutions at Deutsche Bank in Germany, recently revealed in an Efma interview that he is interested in the millennial generation, which is expected to make up 50% of the bank’s client base in 2020. (Watch the video interview)
Nevertheless, banks should be more careful about senior customers or they may lose this present, important source of revenue to new players such as US firm United Income, which focuses on individuals who are approaching, transitioning to or in retirement. United Income provides basic money management, financial planning, investment management, and concierge services, specifically to address non-financial but financially important issues that affect people as they retire. That includes end-of-life signing, so things like hospice care or in-house care, to more fun things like figuring out what to do with your time in retirement.
“Our vision is to be that holistic, one-stop platform for people that are in retirement, where all financial service needs can be met,” said Matt Fellowes, founder and CEO of United Income in an Efma interview. “This area of the market has been fairly well left alone, there are a lot of blue sky opportunities to innovate with products and services.” (Read the full interview)
So how can banks keep their aging customers and even acquire more of them? Here are some successful strategies adopted by banks.
Educate older customers
The senior segment is particularly affected by the branch reduction policies of some banks, especially in the UK and in Northern Europe. Indeed, elderly people who live in rural areas where the nearest bank branch closed, need to use digital banking solutions. And to do so, they must be digitally savvy.
To help them, Barclays Bank in the UK launched the Digital Eagles program in 2013 where tech-savvy volunteers from the bank run ‘Tea and Teach’ sessions to help thousands of older people in their journey to become digitally savvy. This ambitious and successful program won an Efma Accenture DMI Award in 2014 and inspired banks around the world. (Read the full case study)
“As a branch manager, I want to help the community that I work and live in,” said Digital Eagle Shweta Walia, a branch manager in Derby. “It’s the satisfaction to be able to help people who need it, to be able to share your knowledge and to learn about what they do. We might work for a bank, but we are no different from anybody else.” (Read the article on Barclays website)
Focus on the senior segment
In Turkey, DenizBank takes the senior segment seriously. Aware that differences in customer generations affect the sales process, the bank created its Generational Sales app to train its tellers to talk and sell its products to customers according to the generation they belong to. Training covers the communication diversity between the generations through a mobile application, motivating relationship managers to understand generational decision-making motives, improve their communication skills and establish a better relationship with their customers. (Read the full case study)
DenizBank also created a separate department specialized only in senior banking and bringing up the community service approach to segment level. Privileged Senior Banking Service Model is a pioneering segment approach with its value proposition enabling both financial inclusion and fulfilment of community-based financial needs for the underserved senior population in Turkey. The bank has adopted a specialized language for seniors in all marketing communications, and has established Special Service Corners in branches. As a result, seniors have the highest NPS score in DenizBank and the number of retired customers, which was 23,000 in 2010, exceeded 1 million at the end of Jul 2017 with a market share of 9.32%. (Read the full case study)
In Serbia, Societe Generale Serbia decided to focus on the pensioner sub-segment. Evergrin klub was meant to brand the existing relationship with pensioners and to create competitive differentiation in the market. Evergrin klub offers its members dedicated banking products and services, discounts and events. This dedicated approach brought a strong increase of pensioners compared with the increase of Retail Payroll customers at the bank (75% vs 25%). (Read the full case study)
Create products for seniors
Seniors have their own financial needs and some banks satisfy these by providing them with tailor-made products. Fifth Third Bank in the US launched Fifth Third LegacyLink, a digital platform that provides a simple, straightforward approach to estate management. Available online and via mobile app, LegacyLink’s valuable educational content and interactive checklists are free and open to all. An additional paid-subscription service, Asset Manager, helps users catalog, track and distribute estate assets. The secure digital platform provides consumers the ability to serve themselves or to seek help from Fifth Third. Fifth Third’s paid LegacyLink account is $99 a year and offers additional features allowing customers to organize assets in an online catalog including pictures, value estimates and even personal notes to beneficiaries. (Read the press release on Fifth Third Bank's website)
Other banks have created more traditional banking products but dedicated to seniors. Axis Bank in India launched a Senior Privilege Savings Account in 2013. The bank offers senior citizens a product built around relevant needs: healthcare tie-up, bill payment through branches, preferential treatment, and ID card. (Read the full case study)
In the Philippines, PNB Savings Bank partnered with the Social Security System (SSS) to launch the SSS Pension Loan Program, which is open to all active SSS pensioners up to 70 years old. Clients can enjoy very low interest rates and free comprehensive insurance coverage which includes: Credit Insurance, where the existing loan balance will be fully settled upon death of the pensioner; ATMSafe, which provides pensioners added security and protection from ATM skimming or any other form of ATM theft scam; and the Healthy Ka Pinoy Emergency Medical Card, which extends to pensioners emergency treatment at any of the 890 accredited hospitals and clinics in the Philippines. (Read the full case study)
National Bank of Greece (NBG) is also interested in helping its older customers. At the NBG i-bank #fintech2 crowdhackathon competition, held in October 2017, one of the winning teams created a ‘robo-advisor for the elderly’ app. Named FinAssist, this solution is a personalized agent that can communicate over voice with the user to execute basic banking tasks on their behalf. (Read the article on the crowdhackathon's website)
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