Nimish Dwivedi A bank customer gets a call from an overzealous telecaller during their afternoon nap offering a credit card. An erroneously mentioned ‘yes’ results in a card, a statement, fees, late payment charges and a bad credit history. Now imagine if that customer is a septuagenarian, widower living by himself. This is a recurring grim reality of today’s sales-focused, outsourcing-dependent banking sector.
India is a ‘young’ country. But there is a different dimension to this ‘young demographic’ attribute. Census indicates more than 104 million people are aged 60 years and above. A segment likely to go up to 300 million by 2050. A demographic that is almost the size of entire countries such as Vietnam or Egypt. And living by themselves due to changing social structures.
Banking propositions for this segment do not extend beyond slightly higher rates on deposits with some insurance covers and free-for-life debit cards. Banks just assume all their customers are internet, smartphone and debit/credit product savvy. They often ignore the septuagenarians, octogenarians and nonagenarians — “The Passbook Generation”, who are more comfortable with old world pass books, cheque books and branch visits.
Banking propositions for this segment need to evolve and consider:
1) Home delivery: Even diagnostic centres now come home. Banks can provide a similar home delivery service for services such as delivering cash, collecting cheques, premiums, repayments and updating passbooks.
2) Special services: Akin to services for high-worth individuals, banks can provide allocated parking space, wheel chairs, designated areas in the branch for transactional needs and even dedicated relationship managers.
3) Healthcare cover: To solve the challenge of inadequate medical cover, bank accounts can provide free medical insurance plus discounted medical cover options to senior citizens. The coverage scope should include dental and optical care besides travel insurance options.
4) Faster clearance: This segment heavily relies on pension funds or remittances from their children. Preferred exchange rates, instant credit and a simple call from the bank can make a significant difference.
5) Bill management: This segment cannot wait in queues and if net savvy, they are prone to keying in wrong account numbers or card numbers. Now imagine if the bank at home service includes collecting and paying all due bills.
6) Money management: Old people have regular assessable incomes coming through pensions, rent or interests. They aspire to travel or need cars with drivers given the difficulty of commuting in our cities. Banks need to structure segment-specific auto, travel and home refurbishment loans. Besides preferred rates, such loans can come with value-added benefits such as discounts from services that provide drivers and offers from travel agents.
7) Value-added benefits: Banks can also provide valued added benefits to this community for enhancing their fitness like discounted and exclusive time slots at gyms and fitness centres.
The writer is Business Director, Cards and Payments, VP Bank-FE Credit, Vietnam. The views are personal