Perspective: Why Data is the Key to Fulfilling Retirees’ Unmet Banking Needs 

Each day, about 10,000 Baby Boomers turn 65, qualifying themselves for Medicare and—traditionally—retirement. Retirement presents a significant shift for many Americans as they transition their financial reliance from wages to accumulated wealth and settle into their golden years.

Retirement also presents a major shift for the financial services industry, as members of the largest and longest-lived generation move their money to the financial institutions that they deem to be best equipped to meet their changing financial needs. With American households possessing about $748,000 in average net worth, retirees’ financial decisions carry weight for financial services companies.

But as retirement experts focus on the need to save and invest money, they have limited understanding of where retirees prefer to keep their money, how they will spend and manage funds, and which payment products they will use. People ages 50-70—also known as Transitioners due to their transition in financial habits—certainly change their financial behaviors to accommodate their new lives in retirement. This presents financial services companies with a major opportunity—as well as a major risk—to use innovative Fintech products to meet the needs of their Transitioner customers.

Understanding Your Transitioner Customers’ Needs

Few retirees today have a unified view of their collective financial assets and income, along with the access to funds, money movement capabilities and other tools that are needed to manage money. This presents financial services institutions the opportunity to create breakthrough products that protects current assets and captures money in motion by satisfying Transitioners’ needs that the current financial marketplace isn’t satisfying.

These unmet needs come in a variety of forms:

  • Better access to rewards and discounts
  • Tools to help users address age-related issues like dementia and elder fraud
  • Account aggregation tools that let users view funds held in the various accounts that they may have, such as 401(k), IRA, SEP, annuities or RSPs
  • Access to a variety of payment options and cash movement vehicles such as checks, cards, P2P and bill payment.
  • An omni-channel experience that allows seamless access on computers, mobile phones and tablets
  • Money management tools that educate, advise and encourage healthy financial behaviors

Strategically meeting any (or several) of these needs will require financial services companies to gather available information about their Transitioner customers’ behavior and preferences. The resulting information and data analytics should then be used to inform which features should be prioritized in the development and deployment of innovative products.

Baby Boomer’s Effects on Your Sector

When developing innovative products to meet the needs of Transitioners, it’s key to also consider how their retirement will impact specific sectors of the finance industry.

For instance, many Transitioners will need to reassess their use of credit, which will affect payment networks and credit card issuers. Faced with reduced incomes, Transitioners may choose to slash their revolving balances or limit their credit card use. Meanwhile, retirement account checks can easily replace spending that currently occurs on payment cards.

At the same time, non-bank providers of annuities such as insurance companies face large-scale de-accumulation and weakened balance sheets as retirees withdraw annuities to live on or move them into bank accounts at different institutions.

These challenges, however, create ample opportunity for new solutions to help Transitioner customers and retain their business. Credit card issuers and payment networks could explore debit cards and prepaid instruments as a means to retain mass market and mass affluent Transitioner customers. Meanwhile, an insurance company could work with a payment network to issue prepaid cards and debit cards to allow direct access of funds in retirement accounts, which would enable the insurer to compete with banks without being a bank.

On top of this easy access, the insurance company could also add money management tools, account aggregation features, omni-channel access, and benefits including rewards and discounts. This would create a new kind account to satisfy Transitioners’ unmet needs while also guarding against retirement’s adverse effects on the insurance company’s sector.

Determining Which Fintech Products to Leverage

Any innovative financial services company will need to incorporate one or more Fintech platforms into its technology infrastructure so that its resulting software can efficiently meet customers’ needs.

A critical tool for determining which Fintech products to leverage within solutions is payments data. Payments represent the critical link between people’s wealth and their spending needs, and properly analyzed payments data can provide valuable information on spending habits that can drive insights into consumers’ behaviors and preferences – especially for Transitioners. A financial services company can then use these insights to inform segmentation, increase cross-sell, provide cash management tools such as budgeting apps, and offer targeted rewards and discounts.

Financial services companies that understand their Transitioner customers well and that nimbly create services with new banking technologies and payments will own the relationship with retirees. In doing so, they’ll be able to successfully compete for Baby Boomer business over the next 15-20 years, while also weathering the winds of change that Baby Boomers’ retirement is bringing to their sector of the financial services industry.


Jairo Riveros is an inspirer, strategist, tactician, and transformer leader across Payments, Insurance, Pensions, and Investments. Passionate about the future of financial services, the use of data and analytics, and the need for new business models to challenge the status quo.

Jairo is the Chief Strategy Officer for Paysend, a global Fintech company born in 2017, based in the UK and regulated by the FCA, servicing over 5 million customers in 60+ countries



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