Digital financial literacy a must for older adults

Financial institutions without digitally-friendly products and services are missing out on the opportunity to inspire confidence in those 60 and over, a population demographic that has almost tripled in the last 50 years in India and is only poised to continue. United Nations Department of Economic and Social Affairs projects that the proportion of Indians aged 60 and older will rise from 7.5% in 2010 to 11.1% in 2025.

Today's older adults are embracing technology and using it more and more in their daily lives. A study, called the ‘State of Seniors’ conducted by Antara and Access Media International in October-November 2020, found that over 76.9% of people over 55 use smartphones.

While senior citizens are predominantly using them to stay connected with loved ones, 53% are using smartphones for work/professional purposes. Digital financial literacy resources can help this growing population demographic take charge of their finances.

Yet, without appropriate digital financial literacy resources, many people shy away from digital banking services or are at risk of fraud. An estimated $36 billion is lost in scams on the elderly, and many elderly people are not clear about the difference between personal and non-personal data when it comes to digital technology.

A survey of 5,000 senior citizens in NCR by Agewell Foundation found that 85.8% didn’t know how to use digital technology or computers, and 74.9% of them felt their lack of digital knowledge was affecting their old age, leaving them feeling marginalised and underprivileged. The biggest hindrance, according to 51% of the respondents, was a lack of training facilities to pick up technology and soft skills related to technology.

Increasing digital financial literacy among older adults

Digital illiteracy has prevented many elderly people in India from benefitting from technology. They lack simple access to essential services such as transferring money or applying for governmental social protections. For many, the only way to accomplish this is with extensive traveling and long queues.

As banking becomes more digital with payment methods shifting from checks and card swipes to PhonePe or Google Pay and tap-to-pay card reading devices, it will be essential for older adults to keep up with digital payment methods to continue to thrive in an ever-digitalizing payments economy.

Even those who are digital-banking skittish after encounters with fraud can be taught to see its value and use it.

Now it's not just older banking customers who are taking note of the importance of digital financial literacy; leading banking institutions are as well. India’s leading Asset Manager, ICICI Prudential Asset Management Company Ltd partnered with GetSetUp to offer classes about financial tools for saving and investment to older adults on the company’s platform. The financial institution will offer classes on topics ranging from basic economic financial principles, investments for retired life, types of mutual funds, and how various funds and other investments work, among others.

Globally there is a push for digital financial services. It’s time that financial institutions focus on their digital products and services. They should ensure that all consumers have the know-how to navigate their tools seamlessly and with confidence.

According to Tech Spotlight Data findings in October 2022, older adults in India are consuming content primarily from their smartphones. Educating these older consumers through digital content is a simple and effective way to activate new digital banking customers.

The institutions most likely to take the lead in gaining this older demographic are those that create seamless UX designs, and simple-to-use products, and offer educational tutorials that meet the needs of diverse consumers instead of banking on the user to figure it out for themselves.

In order to inspire confidence among older adults in digital banking products, the industry offerings need to be strengthened with relevant awareness-building initiatives on preventing frauds and being vigilant.