Counteract these five myths about boomers, banking and technology
Baby boomers hold the keys to the American Dream. No generation in history has done as well financially as those born between 1946 and 1964. They hold two-thirds of all deposits and own 70 percent of the wealth in the United States. More than half of the 75 million baby boomers hold in excess of $100,000 in investable personal assets, and they represent half of all consumer spending in the U.S.
Given these numbers, it’s no surprise baby boomers form the foundation of growth for today’s financial institutions. The true surprise, though, is the relative lack of attention most banks and credit unions pay to this wealthy cohort. Consumer marketers spend just 5-10 percent of their budgets to target baby boomers.
Much of the neglect by marketers stems from ingrained stereotypes and myths. This may explain why just a third of baby boomers are fully engaged with their financial institution and why 20 percent have relationships with at least four financial institutions. To maximize success, marketing initiatives must be based on truth. Thus, banks must recognize and dispel baby boomer myths and engage them with the same purpose and care as millennials, for example.
Keep in mind these five myths that lead to negative boomer stereotypes—and stand out as particularly dangerous for financial institutions.
Myth No. 1: Baby boomers are technologically challenged
In fact, baby boomers represent the fastest growing segment of technology consumers. They spend more money on technology than any other generation.
Myth No. 2: Only Generation Y and Gen X use digital banking
The truth is that 45 percent of baby boomers and seniors actively use online or mobile banking and 71 percent of baby boomers bank online at least once weekly. Once baby boomers use online banking technology, they often become regular users of online services, such as bill payment and personal financial management.
Myth No. 3: Baby boomers are less likely to go online
Research says otherwise. The internet represents the top information source for baby boomers, driving both online and offline actions. Many prefer tablets to smartphones for online research because of larger screen sizes that are easier to read. Thus having a strong online presence and user-friendly website remain critical to achieve primary financial institution status with baby boomers.
Myth No. 4: Account holders prefer mobile over laptops and desktops to access financial information
It’s true that mobile traffic (63 percent) far outpaces desktop and laptop traffic (37 percent) overall. But the picture is more varied when accessing financial information. While 35 percent of account holders use mobile banking daily, 37 percent rely on a combination of mobile, desktop and in-branch channels. These numbers likely skew even more when considering generational factors. For instance, baby boomers tend to favor laptops and desktops, if only for their larger screens and print options.
Myth No. 5: Consumers don’t frequent branches once they start to use mobile remote deposit capture
Branches remain relevant to all generations, regardless of how heavily they use mobile banking or remote deposit capture. Twenty-eight percent of all account holders prefer the branch as their go-to channel, while 19 percent prefer a mix of mobile, desktop and branch.
It’s clear that adopting one channel does not eliminate the use of any other, and account holders who prefer to make deposits remotely remain highly engaged with their financial institutions, including in the branch.
Putting it all together: Get in tune with boomers
Every generation treats money differently, even when in the same life stage. Consumers of all ages today forge relationships with brands that display a deep understanding of their values and needs.
The promising news is this: Baby boomers remain attractive prospects for any financial institution. If you want to reach these consumers, you’ll need insight into their generational attitudes, trends and behaviors so that you can engage with them, enhance their customer experience and increase your profitability.
Thus comes the challenge: Financial institutions need to treat them like attractive prospects. It starts when we dispel the myths and start to interact with this demographic with the same care and attention as millennials. It will help you think more clearly about the types of products consumers from this generation want and need. The wealthiest generation, after all, brings with it a wealth of opportunity.
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Stephen Nikitas is senior strategy director at Harland Clarke.