Pub. 5 2016 Issue 3

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 28 RECENT DATA SHOWS THAT BANKERS NEED TO FOCUS ON THE ELDER GENERATION AS THEIR NEW TARGET MARKET T HE BANKING INDUSTRY should recognize that our population is aging at a dramatic pace. According to the Census Bureau, the number of US citizens age 65 and older will more than triple, particularly between 2015 and 2040. The recent trend in the banking industry is that a lot of time and energy is being spent trying to figure out how to reach the millennial generation, and that’s important, but it’s equally important to pay attention to and understand the aging population and the challenges they’re going to present to the banking industry over time. One major issue is theft. Elder financial abuse been described as the crime of the 21st century. Why? First of all, it’s the law of large numbers. According to the US Department of Health and Human Services Administration on Aging, adults age 65 and older lost approximately $2.9 billion last year as a result of financial exploitation. The more seniors there are, the more opportunity there is for theft. Also, we all have a parent or a grandparent who thinks everyone they meet is “just so nice”? This is important to understand because studies show that as we age, we lose our healthy sense of skepticism. It doesn’t mean that we’re any less intelligent or capable; it just means that we’re more trusting, less discerning and more forgiving. Dr. Shelley Taylor, a professor of psychology at UCLA recently completed a study that provides solid evidence of this dynamic. Dr. Taylor and her colleagues conducted a study where 120 older adults from ages 55 to 84, and 120 younger adults were shown 30 photographs of faces and were asked to rate them on how trustworthy and approachable they seemed. The faces were intentionally selected to look trustworthy, neutral and untrustworthy. Both groups, the older and younger adults, reacted in the same way to the trustworthy and neutral faces. However, when reviewing the untrustworthy faces, the younger adults reacted strongly, while the older adults did not. The older adults saw these faces as more trustworthy and more approachable than the younger adults did. The older adults missed the facial cues that the average person would say are pretty easily distinguished. This study reinforces with visual evidence that older adults exert less effort when judging trustworthiness and therefore provide a target rich environment for financial fraud and exploitation. What’s important for us to take away from this is that older adults are vulnerable, and those of us who are in positions to provide care and protection have a duty to be watchful. The federal banking regulatory agencies are paying more attention to elder financial abuse, which means bankers need to pay more attention. Back in September 2013, the FFIEC issued guidance on Privacy Laws and Reporting Financial Abuse of Older Adults. The guidance is intended to help banks navigate privacy laws and understand what is permissible in the way of information sharing when financial abuse of an older bank customer is suspected. Also, when the CFPB was created, it was created with an Office of Older Americans, and staffed with quality people with extensive backgrounds in elder financial abuse prevention. Denise Murray is a gerontologist and now a community affairs specialist with the OCC. The OCC recognized and is now well positioned to understand the issues older adults will present to the banking industry. And lastly, the FDIC, working with the Consumer Financial Protection Bureau, produced Money Smart for Older Adults…an extension of the FDIC’s popular and well established Money Smart financial literacy training program. Money Smart for Older Adults covers all of the schemes and scams older adults typically fall victim to, so it’s a great resource. A recent study published by MetLife Mature Market Institute estimates that the financial loss by victims of elder financial crimes and exploitation is more than $2.9 billion a year with approximately 2 million seniors being exploited. Awareness of elder financial abuse is growing rapidly and bankers are often relied upon as the front line of defense in the protection of their customers, and as a provider of prevention education and information for elderly customers and their adult children.