With fintech’s appeal to the young and tech-savvy, one might assume, wrongly, that the successful entrepreneurs are millennials who focus on creating lifestyle apps for their age bracket. Another possible misperception is that baby boomers and even older consumers are not the right target audience for fintech.
Recent research challenges these stereotypes. What is the “right” age to become an entrepreneur? And does fintech — promoted as a solution for younger professionals — have solutions for those who have already retired or are close to? The answers to both of these questions might surprise you.
Researchers at the Georgia Institute of Technology and Hitotsubashi University in Japan found that the average age for submitting patents to the U.S. Patent Office is 47, and the highest-value patents often come from people who are 55 years of age or older. We also know from Longevity Economy research that people 50 and older generate more than $7.6 trillion in annual domestic economic activity and start companies at a significantly higher rate than their younger counterparts. Over the past 10 years, an entrepreneur aged 50 or older started one in three businesses in the U.S.
Three 40-plus entrepreneurs — all winners of AARP’s startup competition known as Innovation@50+ LivePitch — counter the existing stereotype. Howard Tischler is the chief executive and co-founder of EverSafe, which aims to protect families and seniors from fraud by monitoring their accounts for suspicious activity. Evin Ollinger is chief executive and co-founder of Golden, a software tool for users to help manage their parents’ finances. Chris Wong is co-founder and chief executive of LifeSite, billed as an online safe deposit box to protect a family’s critical information.
The three executives are part of a growing trend in fintech that recognizes the demand among seniors for digital solutions for their particular financial needs.
This demographic is large and powerful. Recent AARP research found that people aged 50 and older will generate $83 billion in revenue for the fintech sector over the next five years. We also know that 50-and-older consumers represent only 35% of the U.S. population; however, they control more than half of the nation’s investible assets.
Entrepreneurs focused on this customer segment often cite financial issues that affected their parents as inspiring their startup ideas.
Howard Tischler created EverSafe after his mother was financially exploited. He sought a fraud solution so others could avoid being targeted with fraud and scams.
Evin Ollinger’s mom suffered a fall that sent her to the hospital. He found piles of bills and paperwork on her kitchen table, and it took him weeks to get them all sorted and organized. Golden works as a financial caregiving tool, helping adult children manage their parents’ bills and medical expenses, create a fixed-income budget and help identify government benefits for which parents might be eligible.
Chris Wong recognized the need for a digital vault that family members could access in times of crisis when his father experienced a medical issue. He was admitted to the hospital, and Chris was bombarded with questions about his dad’s medical history and medication schedule.
These startups reveal a strong trend toward fintech-based solutions making inroads in households of all ages. Just as personal financial management tools can help young consumers plan their financial future, they can also help older consumers manage a future that has already arrived. Just as artificial intelligence benefits solutions designed for millennials, AI-driven algorithms can also be used to detect fraud activity by bad actors attempting to target retirees.
I hope the financial services industry pays attention to the financial resources and technological readiness of many baby boomers as companies develop tools going forward, and I hope that more entrepreneurs enter this field to help create more financial protection for people of all ages. Doing so will help safeguard the assets we have, and increase seniors’ ability to pass on financial security to future generations.