Neobanks need the older consumer

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Neobanks are young, and they have tended to focus on the younger generations, such as Millennials and the Gen Zers. They are indeed easier to sell neobank services to, but what about the older generations, because after all they tend to have more money.

Younger people already think it is quite normal to use an app for everything, whereas, a person who has been banking with one bank for 40 years, and regularly visits a bank branch, has some issues getting their heads around a bank that has no branches and all its services are handled via an app on a phone. There are trust issues here.

We are not talking about the over 65s here, but the generation that comes after — the middle-aged to put it succinctly. They shouldn’t be ignored, because for one thing, many of them are as tech savvy as the Millennials, and they can get the concept.

In Australia, where neobanks are definitely enjoying a moment in the sun Nielsen says, “The trend toward digital banks is paving the way for neobanks to gain market share. While early adopters of neobanks have traditionally been millennials aged 18 to 35 (as seen across Europe), their customer base has rapidly expanded across 18 to 80 year olds for some brands in Australia.”

Xinja is one of Australia’s new startups and its CEO, Eric Wilson, is a strong advocate for the inclusion of the older generations in targeted marketing. He says that in Xinja’s experience, “While you could argue that millennials are a core audience for neobanks, and they make up 41% of our audience, nevertheless 36% of our audience is over 45, and 9% over 65. We believe it is just as much a question of mindset as generation.”

All neobanks have to do is assist the middle-aged and older consumer with adjusting their mindset about digital only banks. As Wilson says, there is no good reason to leave any part of the population out of the neobank marketing mix.

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