For those of you who don’t follow Ron Shevlin in Forbes, the self-proclaimed “Fintech Snark”, he’s a good read. Today’s post, The Next Generation Of Banking Consumers Are Baby Boomers (Not Gen Z) is more personal than usual. Mr. Shevlin points to the need for financial institutions to address the financial needs of Baby Boomers, such as their obligation to take on the financial management duties for their parents and grandparents.
Ultimately, he contends, banks have to develop a new set of products and services that meet the needs of the Baby Boomers, who have an increasingly complex relationship with banks. As he points out:
There are a number of trends that make today’s Boomers situation different than that of the members of the preceding generation:
1) Lifestyle. As MarketWatch put it, “working has become the new retirement.” According to a LIMRA Secure Retirement Institute survey, 27% of pre-retirees plan to work part-time during retirement, and roughly one in five current retirees are working part-time. Why? For spending money, because they enjoy their work, and to stay intellectually engaged.
2) Family dynamics. Financial accounts are typically designed for individuals, often providing “joint” access for a significant other. Boomers’ financial realities are far different. Many Boomers help their aging parents manage their finances, and for all the talk about how student loans are affecting Millennials, Boomers’ average student loan debt was higher than it was for Millennials in Q1 2019.
3) Healthcare. Transamerica’s annual study on retirement reveals increasing healthcare concerns. Between 2015 and 2017, concerns about: 1) declining health that requires long-term care grew from 36% to 44%; 2) lack of access to adequate and affordable healthcare rose from 25% to 38%; and 3) cognitive decline, dementia, Alzheimer’s increased from 26% to 35%.
The point he makes about taking care of the “Greatest Generation” as they move into their eighties and nineties is a real burden for many Americans – and currently, financial institutions are not making it easy.
As someone with a parent, and in-laws “of a particular age”, I can attest to the need for banks and other financial institutions to step up and address the changing needs of the market. For what it’s worth, the healthcare industry needs to step up, too.
Overview by Peter Reville, Director, Primary Data Services at Mercator Advisory Group