Feature Digital Banking

Move over Gen Z, OAPs the new flag-wavers for challenger banks

Revolut, Starling and Tandem have all released data showing many senior citizens are signing up to their accounts, with experts saying they are tech and financially savvy with children and grandchildren also educating them about fintech.

a man and woman looking at a phone

Older man taught tech by youngster/ Pexels

If you think funky challenger banks are the preserve of city-dwelling, emoji-loving millennials and Gen Z? Think again.

Revolut,Starling and other challenger banks are increasingly being swiped by senior citizens- to settle wagers on the golf course, pay for train trips to museums, and stump up for cruises overseas.

But they are not resonating with all the ageing population, with one national OAP campaigning group saying it had never heard of that "outfit" and that it "must be for the wealthy set" when asked about one well-known challenger bank.

Senior citizen sign-ups for challenger banks are going gangbusters and it's not just competitive foreign exchange rates, whizzy technology and the closure of bank branches which is attracting the over 50s to challenger banks.

Youngsters educate challenger bank virtues to parents and grandparents

But youngsters are also proselytising the virtues of challenger banks to their tech and financially- savvy parents and grandparents.

Revolut, for example, this month revealed that it had seen a 215 per cent uptick in over 55-year-olds users, signalling a new age of ‘silver swipers’.   

Revolut’s data show that the number of transactions by UK users aged 55-74 has quadrupled, while the amount spent has increased by 470 per cent since 2020.

It is not alone in appealing to an older generation: Starling Bank says the proportion of its current account users over 50 is 17.8 per cent while Tandem Bank, which focuses on savings, lending and mortgages, says the over 50s are signing up to its Fixed Term Savings accounts in droves.

OAPs using Revolut abroad

Further figures from Revolut show that retirees are opting to use Revolut to avoid hidden fees abroad. Revolut reported that the 55-64 UK age group has seen a tenfold increase in the amount spent in foreign countries over the past two years, and the 64-75 age group isn’t far behind, registering an 840 per cent increase. Revolut says volumes are just increasing as countries reopen borders.

Revolut says that the trust aspect has been key to the growth in uptake among the older generations, who are becoming more comfortable using fintech services as they grow more mainstream.

Starling Bank, meanwhile, says it hasn’t seen a specific jump in over 50s using its products but that it has always had a broad demographic of customers, with the average age of a Starling Bank customer being 37.

It pointed to a case study, in which Father Stephen Brown, switched to Starling Bank after 50 years with a high street bank, enticed by its technology- “The idea of a bank that runs from an app is brilliant to me”-and being fed up by the level of service he was getting from his existing bank.

As senior citizens want a safe, simple and easily accessible service, Tandem points out it that its customers receive in and pay out of a single verified account and also that its operation centres are all UK-based.

It also pointed to research by Savings Champions, with 90 per cent saying they would be enticed to manage their savings via an app as well as online.

Neobanks not specifically targetting older demographic

Neither Starling Bank nor Tandem said they specifically target an older demographic in their advertising, but that their products appeal to a broad span.

Kieran Hines, an analyst at Celent, which provides tech advice to financial intuitions, told AltFi he had not seen specific data showing older generations increasingly using challenger banks but he “can certainly believe it”.

“There are a lot of people in that age bracket that are highly sophisticated in terms of technology, but also have families, wealth and travel a lot," he said.

“That would naturally lead them to look for some of the benefits that neobanks and other fintech providers can offer when we think about high deposit rates, competitive FX etc."

Over 50s know all about PayPal

“It's also worth remembering that the idea of fintech and challenger banks has been around a while too, and consumers across all age brackets are now both aware and comfortable with the concept. PayPal (arguably one of the first organisations we'd call a fintech today) launched well over 20 years ago for example, when those aged 50 today were in their late 20s.”

Dave Cunningham, chief commercial officer at fintech financial crime firm LexTego, said: “From my personal experience, I'm seeing a huge uptake in the usage of challenger banks, particularly in Ireland.

Revolut is being used by the parents of children who have made it their primary bank account. In order to simplify the sending of money to family friends (I see a huge usage within golf clubs for payment of wagers and for team activities. I see it in soccer, rugby and GAA (Gaelic Athletic Association )clubs to pay for buses, transport and expeditions, tickets etc).

Closure of bank branches helping fintechs

Cunningham added: "Importantly, with the closure of branches and the reduction of services within branches, silver swipers have been forced to use digital services.

"Because the digital service has been so poor from the pillar banks their children and friends have shown them the ease of use of using new bank services and they have converted to those providers."

However, it seems that Revolut has yet to reach all silver surfers, as a spokesperson for one national pensioner campaigning group when asked about Revolut said he had never heard of “that outfit” and that it “must be for the wealthy set”.

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