Mark Aldred, Vice President of Sales, International at Auriga
“The proportion of older people in society is getting bigger. The World Health Organisation forecasts one in six people in the world will be 60 years old or over by 2030.
These demographic changes and their impact on access to financial services were not unforeseen. Even years ago the UK’s financial regulator, the FCA, published a series of papers on the need for age-friendly banking.
Fast forward to now branch and ATM closure programmes that impact the elderly are showing no signs of reducing. The hope remains that older customers will become more digitally savvy.
However, while many are embracing the Internet for things such as entertainment and shopping, a large number are reluctant to move to digital banking services. A recent study by the UK charity and campaigning group Age UK (https://www.ageuk.org.uk/) revealed that over a quarter (27%) of over 65s predominantly banks face-to-face in a branch or other physical location (e.g. a Post Office) while three quarters wish to carry out at least one transaction in a branch. Furthermore, four in ten older people (39%) with a bank account in Britain, (equivalent to 4.09 million people), are not managing their money online.
Banks, governments, and ATM operators understand the need for age-friendly banking. Given the operating costs and reduced footfall, one solution is the creation of shared banking hubs. In the UK, a roll-out of shared banking hubs is being done in association with the Post Office. Each hub is designed to provide basic over the counter banking services with private rooms for consultations with bankers from a customer’s own bank on a rotating basis.
This concept is popular with older customers. The same Age UK research said that when the shared banking hub concept is explained to older customers, half of those with a main bank account (49 per cent) – equivalent to 5.14 million people – said they would be comfortable using one.
However, the shared hub programme is proving slow to get off the ground. While fifty hubs are planned, only four are up and running. By contrast, the consumers association Which? calculates banks and building societies have closed (or scheduled the closure) of 5,699 branches since January 2015 and this is at a rate of around fifty-four each month.
It is not only the numbers of hubs that must change but also how they are configured to deliver banking services. The level of ambition for shared hubs seems quite low. One example is how these hubs represent individual bank brands who provide face-to-face customer services on a rota rather than always allowing access to their trained staff in the hub. Any difficulty in seeing your own “bank manager” when you need them could undermine the value of these hubs to older customers.
Countries like the UK might learn from other markets. For example, this year Spanish banks agreed to widen, not reduce, cashier services, provide more personalised support and adapt their digital services to encourage their greater use by elderly customers.
How Spanish banks intend to use their cash machines for age-friendly services demonstrates that this is one element of digital banking that older customers do get on with so long as the ATM is in a secure location such as inside a branch.
Indeed, that the UK’s shared hub model is so basic, does reveal a missed opportunity to use the latest digital self-service systems to provide services to older customers’ needs.
Banks will say face-to-face services are costly to deliver whether in their own branch or a new shared banking hub. Rising operating costs are a real barrier but there are imaginative alternatives like secure in branch video and voice banking to access a centralised group of skilled financial advisers that can deliver personalised services remotely and 24/7, while reducing operational costs massively.
This approach could be leveraged to allow customers to access all the services of the bank in self-service mode and interact with the bank’s consultants via video and audio assistance. To provide additional guidance integrated digital assistants can “hand hold” and support customers who are uncertain about using digital self-service banking.
Shared banking hubs are a good thing and are likely to become more commonplace even if the pace of deployment remains slow. However, they are not a panacea for lost banking services for vulnerable groups like the elderly unless there is a real investment in people, processes, and technology to make them useful for all customers who want and need face-to-face services in secure spaces that are convenient to them.”
