This is what personal finance apps should be doing to better serve older people (and maybe everyone) – MarketWatch

Theres something curious about mobile and online personal finance apps and websites, sometimes called fintech. Theyre not used much by people over 50, especially low-to-moderate income older adults.

What Id tell my fellow 50-plusers: Its not you, itsthem the fintech designers and marketers.

Online bankinghas never been more important than it is now for older adults, Linda Peters, director of Older Adult Programs at the Northwest Side Housing Center in Chicago, said in a digital empowerment presentation at the recent National Council on Aging (NCOA) virtualAge & Actionconference. And yet, she added, there has been a huge digital divide between older adults and banking.

The sites really are not intuitive. Im not sure theyre designed for younger people. Its just that younger people are used to dealing with crappy websites, so they just keep going.

As thepandemichas temporarily closed some bank branches and made visiting open ones and ATMs a potential COVID-19 risk, however, its definitely pushing some people who were previously reluctant adopters to adopt online banking, saidThomas Kamber, executive director of Older Adults Technology Services (OATS) and a Next Avenue Influencer in Aging.

But as the nonprofit Financial Health NetworksFintech Over 50: Designing for Low-to Moderate-Income Older Adultsresearch report (sponsored by the AARP Foundation in collaboration with Chase JPM, +1.96% ) shows, fintech designers and marketers have done a pretty crummy job making their tools ideal for boomers, Gen Xers and the Silent Generation.

Thats especially true for the 56 million Americans over 50 with incomes under $45,000 or so, who could really use the help. According to the Financial Health Networks researchers, only 17% of low-to-moderate-income adults over 50 are financially healthy; 57% are financially coping and 26% are financially vulnerable.

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Its not as if people 50+ are tech Luddites. Most are active users of smartphones and other technology offering access to fintech solutions. Some 86% of adults in their 50s and 81% of those in their 60s have smartphones.

Older low-to-moderate-income adults, the Financial Health Network report said, prefer to feel fully in control over their money and personal information and will be most drawn to fintech companies that put them in the drivers seat. Theyre especially concerned about financial fraud; more than 3.5 million Americans 60+ were victims in 2017.

One reason so many older Americans still dont deposit checks through their bankssmartphone app: fear of what might happen if they do.

In my experience, theres distrust. How do I know my money is going to get to you as opposed to handing my check to a teller? said Donna Turner, chief operations officer at Zelle, a digital payments network owned by a group of major banks.

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The percentage of older adults using mobile checking to deposits has been on the rise during the pandemic, though. A June 2020 SYKES survey of 1,000 people 55+ found that 18% who do use mobile checking did so for the first time due to the pandemic. And Zelle says 55% of people 55 and older are using mobile banking more frequently since the start of the pandemic.

Fear also prevents some older Americans from using personal finance apps to manage their savings and investments.

Said Kamber: If youre using Google Maps and you make a mistake and go down the wrong street, you go down one block. If you use your retirement savings account and accidentally put money in the wrong place, you could lose thousands of dollars.

Kamber is somewhat annoyed by many in the fintech world.

There seems to be a war between user design and engineering and unfortunately, engineers have won. The sites really are not intuitive, he said. Im not sure theyre designed for younger people. Its just that younger people are used to dealing with crappy websites, so they just keep going.

A few highlights from theFintech Over 50report (noted in bold), based on Financial Health Networks focus groups with 90 low-to-moderate-income older adults, along with insights from experts about what those people said.

Many fintech solutions are designed for younger users and dont address the needs of users over 50 properly.

It is surprising, said Heidi Johnson, director of behavioral economics at Financial Health Network. The financial health needs of low-to-middle-income older adults are often serious and similar to those we all experience, with the challenges of building up short-term savings and that we might have to keep working.

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Johnson and Kamber believe its less about designing money management tech tools specifically for older users and more about incorporating these users in the target audience. This population doesnt need super-tailored products, said Johnson. They just need to be included in solutions.

Even though older adults are catching up to younger generations technology use, the stereotype of the tech-illiterate older person persists. Many of the focus group participants, the report noted, seemed to have internalized this stigma of technological ineptitude and largely identified themselves as bad at technology.

Kamber said hes seen it a million times, adding that older people are treated condescendingly and in dismissive ways when theyre trying to learn technology. Then, he said, the worst thing that happens is you dont use the tools to manage your money and you then spend money you dont have.

Only a small number of the focus group participants had tried (or were aware of) more holistic digital financial management tools or more targeted offerings that could help them manage their most common financial challenges, such as insufficient short-term savings, unmanageable debt, inadequate protection from medical shocks, inability to retire fully and financial obligations.

I hear [older] people say: I got my smartphone to send pictures and share photos and for Google Maps, said Kamber. They dont think of financial management as one of the core killer apps.

Some of the focus group participants ran into challenges navigating within an application, losing their way after an inadvertent click or a transition to an unfamiliar page.

The focus group participants would sometimes respond by abandoning their task, closing an application or turning off a device just so they could find their way back to familiar territory.

Older people want good, clean design, said Kamber. Theyre like the Scandinavian design consumers of the internet.

Some participants were wary of automated bill paying or account transfers, which raised fears for lower income older adults who wanted the ability to monitor and control the flow of money in and out of their accounts closely.

For many of them, the researchers said, taking financial decisions out of their hands put them at risk of paying additional fees.

Many participants expressed an aversion to fintech products specifically targeted toward older users.

Instead, they said they desired a mass-market product that meets their specific needs, without marginalizing them for their age or demographic.

What could help make personal finance apps and tech tools better for people 50+? The Financial Health Network researchers, Johnson and Kamber have numerous recommendations for fintech designers, including these eight:

1. Have older adults as part of your initial focus groups when designing the products and services. Its extremely rare for the companies to do that, Kamber said. He estimates less than 2% of fintech online products are user tested with people over 60. Maybe less than 1%, he added.

And they have to do it in a way thats not tokenistic, Kamber said. That means not calling your grandmother and saying What do you want? and then going to a business meeting and saying: She wants big buttons. Companies instead need to invest enough energy so the information they get about older users is meaningful.

2. Use inclusive messaging, showcasing different ethnicities and backgrounds and framing aging in a positive light. Dont single out low-to-moderate-income older adults for their age, disability status or financial situation.

Said Johnson: When older adults see themselves reflected in marketing and as potential users, theyre much more likely to be interested in trying them out.

3. Make fees clear and tell users what the costs are upfront.Older adults with lower incomes are particularly sensitive to hidden costs and fees, the Financial Health Network researchers noted.

4. Let users test things out.Allow pre-adoption exploration of features by offering product demos and functional mock-ups online where people can browse them, the Financial Health Network report said.

5. Share information concerningfraud protectionand data security early in the users experience with the product.When asking for personal information, explain why, as well as how it will be used and protected.

Older adults who identify with historically marginalized communities, such as people of color, documented and undocumented immigrants and religious minorities often feel apprehensive when financial companies ask for personal information, the Financial Health Network report noted.

6. Let users hit pause on any automatic or recurring actions with their money.Those include auto-payment of bills or auto-contributions of savings. There may be months, particularly for low-to-moderate-income older adults, when they wont have the spare cash to automatically pay a bill on a certain date or move money from checking to savings.

7. Provide navigation signposts.The more the experience is clear, as well as intuitive, the better. Otherwise, older adults may give up because they feel lost.

8. Offer human support to help users when something goes wrong and provide training that covers the full range of the content.Tutorials should include things like a key for icons in the interface; learning materials and how to easily get software updates.

To help train older adults, Zelle has joined with Kambers Senior Planet program from OATS, offering people 60+ free classes about mobile banking and avoiding financial scams.

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And programs like Capital Ones Ready, Set, Bank: Online Banking Made Easy can help. It works with groups like the Northwest Side Housing Center in Chicago and OATS to teach older residents how to use online and mobile banking tools.

Jamie Lutton, senior management of community development for Capital One COF, +2.34% , said at the NCOA conference that after taking its classes, 76% of seniors were more comfortable with online banking and 77% felt safer banking online. But, its worth adding, just 29% actually signed up for online banking afterward.

Johnson believes designers and marketers of personal finance apps and sites have a lot to gain by better serving low-to-middle-income Americans 50 and older.

Think about including them and designing products and services for them and you will be positioned to carry forward with them well beyond the pandemic, she said.