How can financial institutions help our aging workforce?

How can financial institutions help our aging workforce?
Bradley Leimer and Theodora Lau explore changing attitudes that will be covered at Money 20/20

Caspar Herzberg |


We are experiencing an unprecedented global shift in demographics. Our society is aging; we are living longer, healthier and more productive lives. Along with longer lifespans, we are also working longer than before. Soon, we will have five generations working alongside each other. Not only ‘when’ and ‘how long’ we work has changed, ‘how’ we earn a living has also changed. There are an increasing number of contingent workers participating in the ‘gig economy’. There are also more women joining the workforce or even starting their own company than ever before. According to the Women’s Business Enterprise National Council (WBENC), there are 12.3 million women-owned businesses in the US, with women now owning two in every 10 businesses. Gone are the days of single-earning households with one steady paycheck. Adding to the increasingly complex picture is our varied financial obligations, from tuition for our children to financial caregiving for our parents. How can our financial institutions innovate to meet the needs of our evolving world? One could perhaps take a page of the playbook from the East.

Grab started as a ride hailing company in 2012 in Singapore. Since that time, it has become Southeast Asia’s leading super app, fuelled by US$1.46 billion in funding from the Softbank Vision Fund. In addition to transportation, it now has a robust food delivery business and an ever-expanding financial services platform, with the goal of becoming the region’s largest merchant network, insurtech policy provider and fintech lender. Grab’s newly launched financial services offerings branded ‘Grow with Grab’ will include payment and microlending, aimed specifically at the nine million micro-entrepreneurs that it serves today.

Elsewhere in the US, various fintechs are enabling companies to pay workers instantly for completed work. For example, using Square’s Cash App Caviar Couriers can access funds immediately after completing delivery. Marketplaces using the Stripe Connect payment platform can send instant payouts to sellers or service providers. Meanwhile, Uber and GoBank have partnered to provide Uber drivers with instant access to accrued funds via GoBank checking accounts and debit cards. Instant payment solution Earnin sends a workers’ earnings instantly to their bank accounts, instead of having to wait. All these seemingly small innovations are important, especially for many consumers today, where bi-monthly pay cycles do not line up with their bills, leading them to turn to credit card debt and overdraft fees to bridge the gap.

But the story doesn’t stop at payroll. If we are living longer and healthier lives, what do we do with those extra years? Traditional pension schemes and retirement plans assume a direct path of education, career and a hard stop at age 65. But a longer lifespan will enable us not only to work longer, but also to take more risks and try out new things – re-invent and re-skill ourselves, perhaps even start a new company. In fact, over half of all new entrepreneurs in the US are over the age of 45, according to the Kauffman Foundation. And as much as 85% of jobs that will be available in 2030 do not yet exist. 50 is indeed becoming the new 30.

Given this new paradigm, is retirement still relevant? Or should we retire the traditional notion of retirement and re-think how we should manage and grow our savings? As Andrew Scott wrote in his best-selling book 100 Year Life: “The simple truth is that if you live for longer then you will need more money. This means either saving more or working for longer.” But with relatively low rate of savings and investments, what can financial services companies do to help nudge consumers into healthier financial habits? 

Part of this lies in understanding the current longevity trend. While aging is universal, how we age is not homogeneous – and we can no longer segment individuals and their needs by age. A 50-year old today is vastly different than a 50-year old 20 years ago. A 50-year old in China is also different than a 50-year old in Europe or the US. Their financial needs, aspirations and obligations are also likely different. Perhaps the best way to serve them is to better understand what stage they are at in their life. Someone putting children through college will likely have very different needs than an empty-nester – though they could be of the same biological age. Likewise, an entrepreneur starting up a new business will have different needs than those still in traditional corporate or manufacturing roles. In an increasingly connected world in which we leave digital breadcrumbs of nearly every aspect of our lives, emerging technologies such as data analytics and artificial intelligence could prove useful in not only providing contextual insights based on habits, but also guidance or even decisions made automatically on our behalf. 

Just as much as we need to become more flexible in the new era, it is paramount that financial services innovate and adapt to the changing needs of our society. With longer lifespans and longer earning power, we could afford to take more financial risks than ever before; saving smaller amounts will have a much larger impact on our lives with this extended time. We need to be more fluid than ever when it comes to managing our assets, expecting more up and down cycles, and matching our financial tools to help us plan for a greater frequency of multi-generation households and the growing complexity of our financial obligations.

It is more important than ever for us to invest in our future selves and to take advantage of the extra time that we have. The question is, will financial institutions guide us through this new normal, or will we increasingly rely on fintechs and big tech platforms to meet our financial needs? After all, the future of aging should not be a story of survival – but one of living.

Join us at Money20/20 Europe this June in Amsterdam, as we dive further into the game-changing stories and trends, driving forward the global financial services, payments and fintech community. 

Find out more or register for the event

Theodora Lau and Bradley Leimer from Unconventional Ventures in partnership with Money20/20 Europe. They will both speak at the event in June. 

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