It is generally believed that banks and corporations primarily develop fintech products for young advanced users. However, the number of older people is more likely to grow around the world, from baby boomers (people born between 1946 and 1964) to retirees. It has already been estimated that from 2015 to 2050, the global proportion of people aged 60 and older will grow from 12% to 22%. It also often happens that this age group opens up much wider opportunities for businesses – after all, they are still the richest generation, unlike the millennials, and it will remain so until at least 2030. CB Insights has analyzed the market for fintech products offered to older users as well as for general demand trends; below are the most interesting of these trends.
Investing in age
Older people need special investment products, according to CB Insights. First of all, such products should remain profitable long after people retire. The Kindur startup created by bank graduates is already offering such services – it is a financial platform focused on baby boomers who are already retired or are planning to retire. The platform helps users create an individual retirement plan, invest savings in portfolios and automate retirement incomes by consolidating and converting retirement accounts. At the end of 2018, Kindur raised $9 mio in round A from investors including Anthemis Group, Point72 Ventures and Clocktower. At the beginning of 2019, the project received another $1 mio from Inspired Capital Partners.
Another example is Blueprint Income, a startup that offers personal retirement payments, or guaranteed life annuity, in exchange for monthly contributions. The project is addressing the issue of many corporations gradually discontinuing the practice of paying pensions to their employees. CB Insights notes that 20 years ago, 50% of Fortune 500 companies paid pensions to their workers while only 5% continue to do so these days.
Relying on real estate
Earning opportunities for senior citizens may come from real estate, CB Insights notes. Berkeley Economic Review found that almost 80% of baby boomers are homeowners. As a result, fintech startups are trying to help with using this asset for retirement age income. For example, pensioners will be able to make money from renting out their property. The Silvernest startup is helping pensioners to find a roommate to split bills, earn rent and socialize at the same time. According to Silvernest, the homeowners benefiting from the service may earn around $10K a year. The Figure Technologies finetch company is developing quick property-secured loans. This startup’s services may be useful to those who have plenty of property but a lack of cash. The company plans to use blockchain to expedite solvency checks and loan approvals.
Under special protection
Elderly people need special protection when it comes to working with their personal finances, CB Insights notes. This social group most often suffers from financial fraud. For instance, in 2017, according to the Bureau of Consumer Protection, there were some 3.5 mio financial crimes against the elderly in the US, while people aged between 70 and 79 lost some $45K.
At least several startups currently offer services that would help elderly people protect themselves against financial fraud. Thus, the EverSafe project uses machine learning to create their clients’ financial profiles, which are then used to detect signs of fraud during bank card transactions. The program detects withdrawal of unusually large sums of cash, changes in spending patterns or unusual investment activity. The True Link Financial startup offers a special personalized bank card for the elderly. With this card, people can purchase food, medicines, movie and theater tickets, etc. But some types of transactions, like mobile transactions or international payments, are blocked.
The number of people who seek to draw up a will, particularly concerning real estate and trust funds, is increasing year by year. Yet, according to CB Insights, 2 out of 5 baby boomers do not make any. Today, those involved in industry choose to rely mostly on paper documents – but technology solutions are starting to infiltrate this niche as well. For instance, the Fidelity Investments startup offers FidSafe, a free tool designed to transfer property management process into digital form. Users can store, open access to, and even share digital files and information ranging from password lists to traditionally drawn up wills. To provide personal accounts security, the project uses end-to-end encryption and two-factor authentication. A similar solution is offered by the Cake project, which allows elderly people both to make wills and choose their funeral service preferences. The project users can provide online access to such documents to their families and friends.
Another niche for technology solutions is making wills that have legally binding effect. Such options are offered by the Trust&Will platform, which has become the partner of the Notarize remote notary service. The two have joined forces to work on the United States’ project for creating first end-to-end digital will. The company assures that users will spend only ten minutes making an individual legally valid plan as regards inheriting their real estate upon their passing.
By Olga Blinova