Older generations are becoming more perceptive to new financial technology in the wake of the coronavirus pandemic, research shows.
According to a study conducted by payments-as-a-service firm Modulr, more than two-thirds (65%) of over 65s say they are more open to using financial services or payment methods that are quicker and more convenient for them.
Similarly, around half (47%) also say their expectations of payment experiences have grown as a result of doing more online shopping and leveraging digital services during the pandemic.
While so-called ‘boomers’ are often labelled as technology-shy, the research suggests fintech companies overlooking this demographic are missing out on a sizeable customer base.
Myles Stephenson, Founder and CEO of Modulr, says the study highlights an opportunity for fintechs to capitalise on this growing appetite for digital services and payment methods. However, to fully grasp the opportunity, Stephenson notes that fintechs “need to know where to focus their energy”.
“On the surface, this means providing the best digital experience, but they need to make sure their payments plumbing can support their ambitions,” he explains.
“Only those fintechs that create – and brands that adopt – an instant, convenient and trusted customer experience will succeed in the instant economy.”
Consumers across all age brackets now expect instant payments and seamless services, the study found. Indeed, nearly three-quarters (74%) of over 65s say they use bank transfer and payment apps to make instant payments to friends and family, for example, placing this age group just marginally behind 25 to 44 year olds, 87% of whom use this payment method.
Yet despite this growing demand for digital banking and payment services, only one-third of survey respondents see any type of service provider fully meeting their expectations when it comes to payments.
This new-found expectation has, in part, been driven by the quality and ease of services offered by companies in other industries, with retail a particular stand-out. In fact, the majority of all those surveyed believe there’s no excuse for any brand not to offer the same kind of instant services they enjoy in other areas of their life, such as those delivered by Uber or Amazon.
Vishaal Vadher, Payments at Revolut, notes that the pandemic has accelerated the adoption of behaviours that were already gaining traction.
“The fact is that customers’ behaviour isn’t changing, it’s already changed,” he says. “The digital consumer is already here and we’re not just talking about millennials and Gen Z.”
“Modulr’s research proves that a truly digital financial experience is not just a trend for the future, but a requirement for survival now,” Vadher adds.
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Janine Hirt, CEO of Innovate Finance acknowledges the “many unique strengths” of fintech companies and the products they deliver. However, the industry should be wary of leaving consumers behind during this surge to digital services.
Modulr’s research reveals that many people still find paying for things online to be a source of frustration, and this is a “critical challenge” that the fintech industry must address, Hirt insists.
Notably, one-in-five told Modulr they expect Britain to be a cashless society within the next five years, and 71% also say they now withdraw less cash than they did pre-pandemic.
“Given the speed of innovation in payments, there is a risk of excluding those who are not as confident with digital transactions,” she says. “Part of the solution must be fintechs continuously improving their consumer-facing processes, so that they are clear, easy to use for all ages, and foster trust.”
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