In this News Insight, American Banker discusses how banks must not forget older Americans as they plan their digital transformation initiatives. For deeper demographic insights and strategic guidance on personalizing the bank branch experience, download our in-depth study from Celent on delivering excellent customer service in banking—Samsung Insights editorial team

Digital transformation for banks has been all about targeting millennials, people born between 1981 to 1996, and the digital natives who are expected to drive the next generation of growth and profitability. In fact, organizations are spending 500 percent more on marketing to millennials than any other demographic group.

But there is another segment of customers with equal spending power that banks cannot afford to overlook: baby boomers, or people born in the years following World War II.

While stereotypes might argue this older generation resists technology and is slow to adopt new products, banks need to reassess. Banks must digitize and adapt to new technology to meet changing consumer demand, but at the same time they cannot overlook those that have been a part of their customer base for far longer. A middle ground must be found between adopting technology and making it user friendly for those who are not digital natives.

They may not be digital natives, but older Americans are increasingly getting online — 66 percent of Americans 65 and older used the internet in 2018, according to a study by Pew Research Center, and that figure has doubled in just 10 years. Yet it is young digital natives who are designing the next generation of banking interfaces, including on smartphones and mobile devices. The problem is that in many cases these young designers do not fully understand the challenges older customers face while using the technology, including more limited agility and the reduction of cognitive and visual abilities.

As such, it is no surprise that baby boomers don’t always take easily to new-age banking. But that doesn’t mean they don’t hold value for financial institutions. Baby boomers currently hold two-thirds of all deposits in the U.S. and they will remain the nation’s wealthiest generation until at least 2030.

Converting baby boomers to new products and services could spur as much as $82 billion in additional deposits and $443 billion in additional investable assets, the American Bankers Association has estimated.

There are also generational differences in loyalty and trust — 58 percent of older customers have never switched financial institutions. By comparison, millennials are three times more likely to open an account with a competitor and five times more likely to close all of their accounts with their primary bank.

However, like all other demographics, older customers are also disengaged with their banks. According to Gallup, only one in three baby boomers is fully engaged with their primary bank, meaning surveyed customers reported feeling a strong connection to their bank and are true believers in the company, while two in 10 are actively disengaged, reporting a negative connection to the company, and nearly half (46 percent) are indifferent, reporting feeling simply satisfied. The reason behind this disenchantment is that banks just don’t understand them and largely ignore them.

To improve this engagement, there are a few simple things banks can do. For starters, they can take into account age-related and perceptual motor issues by involving older customers in usability tests, increasing font size on websites and mobile applications and keeping error messages simple and clear. They can also use brighter colors and pointers to ensure older customers can use credit and debit cards more easily out in the nondigital world, and offer more voice options on customer help lines.

Banks also need to focus on getting older customers more comfortable with digital and online banking. As older customers adjust to digital products, their willingness to conduct more complex interactions through websites and apps will also increase.

Baby boomers are the last frontier in the digital transformation of banks. Helping these customers adapt could easily boost growth and profitability.

This article was written by Chet Kamat from American Banker and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

For more insights to inform digital transformation in the bank branch, download our in-depth study from Celent on delivering excellent customer service

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