The world around us is always changing. Looking at the trajectory of financial services post-crisis, a raft of new competitors entered markets where previously the barriers were thought to be too high. Technology has helped overcome those barriers to entry and FinTech startups have played a crucial role in reworking the landscape across the sector.
By and large these newcomers have concentrated almost exclusively on the much sought-after millennials. Digitally native, tech savvy and, crucially, trusting of new technologies and business models, new products and services have been largely designed with their needs and lifestyles in mind.
Yet, the statistics tell a different story about consumers across a number of economies. That story is largely one of ageing societies. These key consumer groups have been largely ignored by a broad range of sectors.
The longevity economy is not simply a story of the aged, requiring more care and acting as a drag on economic growth but one of populations that are living, working and remaining active for longer. Their patterns of demand are shifting and financial services, as well as a number of other industries, need to sit up and take notice. They need to think about (and re-think) their strategies in order to meet the evolving demand of this fast-growing consumer segment.
- One in five people on this planet will be aged 60 and over by mid-century, rising from 900 million in 2015 to 2.1 billion in 2050
- Bank of America Merrill Lynch projects that the global spending power of those aged 60-plus will reach US$15 trillion (S$20 trillion) annually by 2020
- The UK’s population of over-65s is expected to rise from 10 million in 2010 to 19 million by 2050. By 2030 the ‘silver economy’ will have grown by more than 60 per cent to £127 billion
- 50+ consumers control 83% of household wealth and are worth about $8 trillion in the United States alone
- Less than 15% of companies have established any sort of business strategy focused on older adults
- Less than 10% of marketing dollars are aimed at the 50+ population
- Advertisers spend 500% more on millennials than all other age groups
It is time for innovators from across financial services to broaden their horizons and focus on the significant opportunities that the longevity economy presents. FinTech, at its best, finds opportunities to shake up conventional thinking and deliver something better. Leveraging technology and designing products and services with an understanding of the needs of the Over 55’s is, simply put, good business.
“…An overarching idea that older people are always takers, never givers; always consumers, never producers. And as a result, companies make products that, at their core, are designed for passive participants in society. Meanwhile, older people increasingly demand to be active participants. That fundamental disconnect, combined with the mind-boggling wealth and size of the burgeoning older population, is enough to turn entire industries inside out as new entrants figure out how to give older adults the tools they need to participate, create, build, and influence the world around them”. – Joe Coughlin, The Longevity Economy