What is financial innovation for aging & longevity ?

and how fintech can make a difference for older Adults and their family caregivers

The demographic trend of aging around the world bears new challenges and opportunities for the financial sector. Data show that the 50 plus population in the US (not less than 110 million people) is driving remarkable economic growth. In the US alone, by 2030, this segment is expected to contribute to the US economy more than 50 percent of the GDP. If life expectancy continues to rise, there is no doubt that the spending power of this age group will manifest even more than before in e-commerce and online transactions.

The aging process is longer and more dynamic than ever. With extended disability-free stages including opportunities in the labor market, this demographic creates new opportunities for every generation. The aging process is also associated with financial risks such as extended periods of chronic conditions and long-term care and a higher economic burden on individuals and their family caregivers. In addition, the marginalization of public healthcare and pensions provided by the state has resulted in increased medical costs, unmanageable late-life debt, and inadequate savings.

All of these factors are creating a need for financial technologies to play a central role by offering innovative solutions to plan, monitor and finance a longer life, while protecting and supporting aging adults and their family caregivers.

In light of these changes, financial institutions now recognize the value of fintechs across all ages to achieve sustainable engagement with their aging customers. Using a consumer-centric approach and leveraging Open Banking and APIs, it is also becoming easier for financial institutions to build partnerships with fintech companies to increase financial inclusion and improve financial health across every age group.

By leveraging on the success of fintech in the last decades, our research has shown that Financial institutions (banks, insurance companies, asset management firms and other financial services) are interested in protecting and serving aging and older adults through fintech solutions. Nevertheless, they do not necessarily understand what is the right approach to address their needs and protect their vulnerabilities.

In addition, Open Banking and Open Finance are expected to boost data sharing among family members. The result is not only better planning for retirement but also more opportunities to protect older adults from scams and fraud. By building new mechanisms for monitoring financial transactions, Open Finance can help family caregivers to be involved in the financial routines of their loved ones.

Ultimately, fintech entrepreneurs want to expand their offerings to aging and older adults, while VCs, accelerators and incubators are interested in allocating resources for the development of aging-related financial technologies into viable commercial solutions.

Based on our research in the past year, the global fintech-for-aging-and longevity offerings can be divided into the following areas:

Protection — Fighting scams and fraud against older adults.

Estate and end-of-life planning — Democratizing end-of-life planning through digital trusts and will and digital vaults.

Managing and monitoring finances — The optimization of healthcare costs, social security rights, assisting in bill payments, and assisting family caregivers with the monitoring of their parents’ finances.

Longevity financing — Leveraging existing assets and skills to finance a longer life, including digital reverse mortgages for “aging in place”, home-sharing, and the utilization of skills and life insurance to generate more income in retirement.

Retirement planning — PensionTech, Robo-retirements and Self-driven finance apps for personalized retirement planning, while optimizing decisions for the future.

Digital Communities and marketplaces — Digital hubs for the 50 plus population offering a combination of health, wealth and education products in one place.

Other fintech offerings include the use of real time health data for financial rewards, life-long learning, digital literacy, accessibility and more.

For more information on the opportunities in the Fintech for aging and longevity ecosystem, please contact sara@fintech4longevity.com

We help the financial sector to be well prepared for the demographic trend of aging by focusing on financial innovation