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The Ageing Mind: Enabling Lifelong Engagement with Financial Services

What are the needs, preferences and vulnerabilities of older consumers?

What are the specific challenges faced by older consumers in retail banking?

These are just two of the questions that the FCA sought to answer through a programme of work on the ageing population launched in 2016. Last month the findings from this research were published in an Occasional Paper (OP31), which presents the FCA’s ideas for firms and others to consider, in order to drive further innovation in the interests of older consumers.

We’re very proud that the Big Window® was commissioned by the FCA to undertake research to inform the Ageing Population Occasional Paper. Our reports, which are published alongside OP31, explore two broad areas:

The Ageing Mind draws on an extensive review of the academic literature about how changes in the brain affect our decisions and behaviour as we age. We looked at two different types of research in this area: longitudinal studies that follow and test a group of people over a long period and experimental studies that compare the performance of older and young participants.

We discovered that the picture is complicated but with underlying and consistent patterns…

  1. Cognitive ageing happens to everyone though the pace and degree of change varies from individual to individual.
  2. As we get older some of our cognitive abilities improve whilst others decline.
  3. Normal cognitive ageing isn’t a problem when we undertake routine daily tasks. It’s only when we are doing something that is complex or unfamiliar that cognitive ageing becomes an obstacle.
  4. What was once straightforward and routine can start to feel more complex and unfamiliar as we get older

It is these last two points that really matter when we consider the relevance of cognitive ageing for financial services.

Complexityfamiliaritymap

As our heat map shows, financial tasks vary in familiarity and complexity. Some tasks, such as going into a local branch to withdraw bills, are, to most, fairly straightforward and are performed regularly.

However, other decisions, such as changing an insurance provider or deciding what to do about a pension pot, are more complex and only happen occasionally. It is these tasks that can be more taxing for even the normally ageing mind because of four well-evidenced age-related impacts:

  • Divided attention: Older people tend to find it harder than younger people to divide attention between multiple pieces of information at the same time
  • Learning: Older adults perform less well than younger adults on tasks that require them to learn a new skill or take on new information
  • Choice and complexity: Older consumers are less likely to take account of all relevant information when making a complex decision and therefore they tend to make sub-optimal choices
  • Prediction: Older adults recall of the past and predictions about the future are blurry and not well defined.

Some people with Mild Cognitive Impairment (MCI) or dementia experience cognitive changes that are more marked than a healthy person of their age. Up to 20% of the population over 65 may be experiencing the impairments in memory or decision making abilities associated with MCI and approximately 7% are living with dementia. As the population continues to age, these proportions will continue to grow.

This means that for this significant subset of the older population, simplicity, predictability and familiarity are much needed. For first-hand insights into this, follow this link to hear Wendy Mitchell talking to us about her experiences of living with dementia and accessing banking services.

The Ageing Mind considers the implications of cognitive change for providers by focusing on nine financial services-related tasks that vary in familiarity and complexity.

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We give examples of each of the nine tasks and put forward recommendations for meeting the challenges identified within our review. We know from the FCA’s review that some providers are already making service adaptations to respond to the needs of older consumers. However, many are at the early stages of understanding the implications of our ageing population for their product and service design. Given this, we hope that the findings and recommendations of Ageing Mind make a thoughtful and practical contribution to this important and emergent agenda.

If you’d like to talk to us more about any of age-related work, or consumer psychology more generally, please email us on info@the-big-window.co.uk

 

Our paper has been accepted by esteemed Journal of Advertising Research!

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Are your consumers more likely to respond to emotionally- or rationally-orientated advertising messages? How might these preferences changes as your consumers age? These are very important questions and particularly so given the ageing nature of population. In the UK, the average life expectancy of children born in 2013 is over 90 years old, and the number of people aged over 65 already outnumbers those under 16. By 2030, nearly a third of the UK population will be aged 60+years.

This means we simply must understand what changes as our consumers age.

Our soon to be published paper in top peer-reviewed American Journal of Advertising Research explores this. It looks at age-related reactions to advertising and explicitly whether and how, as we age, we change our preferences for emotionally based or rationally based advertising messages. It explores the specifics of how older people might respond differently to different types of advertising (e.g. call to action versus brand-building advertising)

Watch out for our paper to be published at the end of the year.

 

Starting as We Mean to Go On: The Big Window team using its BE Expertise to Help to Set New Brand on the Right Track

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This year, Covea launched its new and very first B2C brand Provident. In doing so, it was conscious of the need to do the right things right first time. One of these being to ensure that its policy documents alongside other consumer communications were written in a way that encouraged customers and potential customers to feel engaged with what they had purchased and be aware of what they were and were not covered for.

This meant seeing the documents through the eyes of their consumers, not simply from an internal perspective, which is where the partnership and work with the Big Window came in.

the Big Window used its expertise and experience with Behavioural Economics to help Covea design its first policy documents in ways that fitted with how people truly process information. Each of the key areas of the document were deconstructed and then reconstructed to work with the heuristics/biases that consumers were most likely to use when processing them.

The effectiveness of these were tested in a quantitative study of c500 respondents that looked at reactions to previous intermediated versions of the policy documents versus the new BE-friendly version, all results showing a positive endorsement of the new versions.

This programme was fundamentally about using BE-related knowledge to do the right things in the right way from the start. It was about using the BE principles to substantiate the new brand’s positioning of simplicity and clarity. It was about a collaboration of research expertise and consumer psychology.

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