It is estimated that 1 in 6 persons, 60 years or older experienced some form of abuse in community settings that can cause critical physical injuries and long-term psychological effects. Elder abuse comes in many forms and one of the most devastating is financial abuse. Around 6.8% of financial abuse occur in community settings while 13.8% in institution settings. While prevention of financial abuse is possible using digital technology, it can also become a source of fraudulent activity that affects seniors. Technology can both bring advantages and disadvantages to the financial situation of elderly people.
Benefits of financial services technology
Not all seniors may be connected compared to the public, but the number of elderly persons who are embracing digital technology is rising. In the US, 4 in 10 seniors own a smartphone and around 70% of mature adults say that they go online.
Digital financial services can benefit the elderly in many ways. It can help them manage physical difficulties due to age such as mobility and memory. For example, banking at home is easier that going to the bank. There are tools that can remind seniors if they need to pay a bill, top up their current accounts, or automate savings deposit.
Preparing for retirement
Unfortunately, not every senior is prepared financially for old age and there are not a lot of financial products that are targeted at the elderly. In Asia and many countries of the world, there is no savings and pension plan that will see them through retirement. Financial literacy is sadly lacking.
Even those who have pensions find it a struggle to budget their funds partly because pensions are smaller than pre-retirement income. In this regard, financial technology can assist in preparing the elderly retire well. Savings plans through automatic deductions as well as scheduled money transfers can beef up their retirement funds. Text reminders or emails can also remind them to put away money from their pay.
Protecting vulnerable seniors from financial exploitation
While it is true that digital technology can help prepare seniors for retirement and assist them in facing the physical challenges of everyday living, it also exposes the elderly to abuse and exploitation. Declining cognitive abilities make them prone to manipulation as they can also easily leave passwords and financial documents lying around. They may also be easily tricked by fraudsters whether family or friends to invest or put money into a non-existing account. Scam marketing, identity theft, data breach, diversion of assets, and credit card thefts are other examples of financial manipulation.
Hence, it is vital that financial products are designed to keep vulnerable seniors safe from financial abuse. Some start-up companies offer services that focus on handling an elderly’s finances. Bills are scrutinized closely before payment and unusual withdrawals are monitored. Investment accounts and credit and debit cards are watched closely with an alert system that aims to stop fraudsters before an elderly’s funds are depleted. Technology can also detect anomalies, missing deposits, or erratic spending behavior and an alert is sent to the client or their trusted supporters.
Digital technology can assist the elderly prepare and manage their finances easily after retirement. It can also become a tool for exploiters to abuse seniors financially. However, if there is a right balance of consumer protection and vigilance from financial service providers, family, and friends, it can help seniors prosper and enjoy their end of life.