28 March 2024

Tech, audience understanding, and innovation in the later life lending sector

By Simon Hayton, Chief Operating Officer at Pure Retirement

For many, the year starts as an opportunity to take stock and establish priorities for the coming twelve months. Following the implementation of the FCA’s Consumer Duty, it’s safe to assume that a common question in financial services is: how can we deliver improved customer experiences and outcomes?

Within the later life lending sphere, let’s start by reflecting on the sector’s changing audience. The diversified customer profile in recent years, as products such as lifetime mortgages have become more mainstream, has helped drive product innovation and safeguard market resilience. Still, it’s vitally important that we continue to assess the changing needs of an evolving demographic.

Their changing relationship with technology can best illustrate the evolution of the over-55s customer profile in recent years. Anyone who’s worked from the 1990s onwards will likely had some need to use computers. At the same time, the prevalence of smartphones over the last decade and a half has meant that today’s retirees are surrounded by technology – and, by extension, by and large, likely more confident in using it – than any preceding generation.

This is backed up by the recent figures from the Office of National Statistics, which found that the over-70s spent more time online (excluding working or streaming video) than any other cohort apart from the under-20s, averaging 43 minutes a day browsing the web and checking email – equating ten more minutes a day on average than someone in their 40s. Interestingly, while the over-70s lagged far behind those in their 20s when it came to playing console or computer games (8 minutes a day on average, compared to 32), it was still more than those in their 60s, showing that age and a willingness to game isn’t linear.

That same level of technological comfort extends to using digital means to access services, as evidenced by the NHS’ app usage figures for the three months up to December 27th. The app boasts 3.6m registered users aged 66 and over, and 62% (2.2m) had used the app over the period in question, making them the most active users of the app - this includes 256,400 users in their 80s and over 17,000 aged 90 and over.

This trajectory follows 2021 research from Ericsson that saw marked increases in digital activity among those aged 60-69 between 2016 and 2020. This included upticks over the period in question in the numbers of over-60s daily instant messaging (71%, up from 45%), using social networks (69%, up from 43%), watching videos (51%, up from 18%), and viewing full-length movies (46%, up from 18%).

Amid this landscape, it’s unsurprising that the FCA has included a technological element under the Customer Support outcomes – namely a continuous improvement action to ‘provide clients with self-service tools like online portals or mobile apps to manage their accounts and seek support’.

With everything we’ve mentioned so far, and with over-55s having had experience of self-managing their insurance and high street banking online, the question for the later life lending sector must be: what can we be doing to not only feed into the FCA’s outcome but also meet the expectations of an increasingly discerning, sophisticated and modern retiree?

This has been at the centre of our thinking when we created and launched MyPure, our lifetime mortgage customer account management platform, which was designed to bring self-service to the equity release market.

The platform lets our customers view their accounts and download documents such as annual statements. Additionally, customers are notified when new documents become available and have the ability to complete their Certificate of Continuing Occupancy online. Customers with drawdown plans can apply for a cash release online, vastly streamlining the process, while ad-hoc repayments can also be made via MyPure, with the option to set up recurring regular repayments too.

Advancement begins with understanding, and being aware that today’s over-55s are turning the stereotypes around the relationship between those in later life and technology is as good a place to start as any. As a later life lending sector, how can we best utilise technology to improve our service offering further and, by extension, the ultimate user experience? It’s certainly a question we’ll be asking internally as we seek to enhance our digital offering, and we invite the rest of the industry to do likewise.

For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.