As time goes by, banks are always on the lookout for the next generation of customers in order to stay relevant and bring in new prospects. Although several articles point to Generation Z (Gen Z) as being the next big thing, another approach has designated Baby Boomers as the next audience that should be targeted by banks.
One report suggested that Gen Z are “much more open to disruption” than previous generations, but it seems that the counterargument to that is that previous generations were also open to disruption when they themselves were teenagers.
As such, Forbes tries to identify the next generation of banking consumers by asking one question: Who will have new and different banking needs that the industry will have to design and redesign products and services for?
The answer to this question is Baby Boomers (generation born between 1946 & 1964), and here are the trends that support his argument as he highlights the reasons that the Boomers’ situation is different that their predecessors.
According to a survey by LIMRA Secure Retirement Institute, 27% of pre-retirees are planning to work at least part-time during their retirement years, while currently roughly 1 in 5 retirees are actually working part-time. The reasons for that are basically the same as why anyone works in the first place; to make money, stay engaged and because they actually enjoy their work.
Although conventional bank accounts are typically made for individuals, who later could give access to a partner, Boomers are known to have a different reality at hand. For example, they usually help out their aging parents to manage their finances, and also they have higher average student loan debt than Millennials did in Q1 2019, making them more affected by student loans than Millennials in the United States.
Since Boomers are technically in the retirement period, it’s safe to assume that healthcare and easy access to financial services naturally go hand-in-hand for this generation. Transamerica’s annual retirement report shows increasing concerns on healthcare, and in the period between 2015 and 2017, it shows that concerns on health requiring long-term care grew from 36% to 44%, and concerns on lack of access to proper, affordable healthcare rose from 25% to 38% in the United States.
Today, Boomers have new, emerging needs that are slowly surfacing as they grow older, and it is exactly that statement that illustrates their need for new digital banking services. These are the need to have security against unethical and fraudulent behavior, to allow permissioned access to family members and trustees, to integrate and connect with estate planning wishes, and to improve the overall management of healthcare costs.
As the future gets increasingly dynamic and digitized, life has been made simpler in a lot of ways, but it also has become more complex for different industries to stay relevant and establish long-term success. When it comes to the banking sector, segmentation is key to survival. Banks, like other businesses, need to identify and serve select niche markets, such as Baby Boomers.
Baby Boomers, Millennials, Gen Z, Generation Z, Healthcare, Family finance, Forbes, Ron Shevlin, opinion, FinTech trends