Magazine article American Banker

Older Adults: Still a Quicker Path to Profits Than Millennials

Magazine article American Banker

Older Adults: Still a Quicker Path to Profits Than Millennials

Article excerpt

Byline: Kevin Tynan

Years ago, seniors were the focus of community banks' marketing efforts. Senior clubs, travel programs, bingo games, financial seminars and even health screenings were among the ways banks routinely targeted pre- and post-retirees.

But all of that has changed. Banks have switched their marketing spotlights to millennials from older adults at a time when retirees are most in need of help to manage a crushing series of financial challenges. But this approach is shortsighted. Though banks have switched audiences, the profit potential of older customers has not changed.

Pre-retirees are in their peak earnings and savings years. They still, for example, constitute 31% of all homebuyers, according to the National Association of Realtors. Further, The Deloitte Center for Financial Services estimates baby boomers -- the youngest of which are 52 -- are expected to continue to be the wealthiest generation in the U.S. until at least 2030.

Big banks have led the charge for millennials -- a strategy that makes sense when a company's economies of scale skew toward feature-laden technologies appealing to younger customers. But it's a strategy that fails to make sense for community banks looking more for profit than promise. For a more immediate payoff, community banks should invest modestly in millennials and more heavily in older adults.

Those 55 and above, according to research by Accenture, are six times more loyal to their primary financial institution than younger customers. They choose financial institutions based on experience rather than technology, and they have a strong preference for in-person visits where customer service can shine.

The soon-to-be and recently retired are also facing an unprecedented set of economic pressures that banks could help them address. A fifth of those in their fifties expect never to retire, according to the Federal Reserve's older adult survey, for instance. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.