Not only does the older generation of Americans — thanks to their significant contributions past and present — play a defining role in who we are as a nation, they play a crucial role in our economy, as well. Individuals born before 1965 hold approximately 65% of deposit balances across all U.S. banks and nearly 70% of all U.S. financial assets. In addition, older customers are among the most loyal clients of community banks, often maintaining long-term relationships with their local branches. Given their loyalty, financial influence, and vulnerability to scams and exploitation, community banks need to make their protection, both emotional and financial, a priority.
Older Americans Month, observed each May, is the perfect time for community banks to demonstrate their commitment to safeguarding and supporting senior customers. By implementing initiatives that educate, protect, and engage seniors, banks can strengthen relationships with this essential customer segment while reinforcing their role as trusted financial partners. What can community banks do to honor and protect senior customers during Older Americans Month and beyond?
Train staff to detect and report elder financial exploitation
Elder financial abuse is a growing concern, with seniors losing billions of dollars annually to scams, fraud, and financial exploitation. Estimates now put elder financial abuse at an annual loss of approximately $28 billion - but community banks can serve as a first line of defense against these threats. Training frontline bank staff to detect and report suspicious activity can go a long way in protecting customers from bad actors. To that end, the American Bankers Association offers a training course for frontline banking personnel, which banks can access at aba.com.
Training areas to focus on:
- Recognizing warning signs of financial abuse such as sudden large withdrawals, unusual wire transfers, or changes in spending patterns
- Identifying and responding to unusual and potentially undue influence from caregivers, family members, or strangers
- Understanding how to report suspected exploitation to the proper authorities while maintaining the customer PII (Personally Identifiable Information)
- Collaborating with organizations such as the Consumer Financial Protection Bureau (CFPB) and the Financial Crimes Enforcement Network (FinCEN) for assistance in developing staff training programs that ensure employees are equipped to recognize and act on signs of elder financial abuse
Partner with law enforcement and APS (Adult Protective Services)
Fighting elder financial exploitation requires a collaborative effort. In this all-hands-on deck approach, community banks should partner with actionable agencies, including:
- Establishing direct communication channels with local law enforcement to report suspicious financial activity efficiently
- Working with APS to provide expert guidance and resources for seniors who may be at risk
- Hosting workshops with guest speakers from law enforcement agencies to educate both employees and customers about fraud prevention
Start a senior financial education program
One of the most effective, and obvious, ways to safeguard seniors from financial fraud and abuse is through education. Community banks can utilize communication tactics that engage seniors — such as direct mail, digital signage, and statement stuffers — to inform them of banker-led financial literacy programs tailored to their needs. These programs can cover topics such as:
- Recognizing and avoiding common scams, such as phishing emails, fake IRS calls, and lottery fraud
- Limiting the sharing of personal information
- Leveraging best practices for securing personal information, such as strong passwords and account activity monitoring
- Understanding power of attorney, wills, trusts, and estate planning to protect assets from exploitation
- Maintaining awareness of consumer financial protection regulations that help protect funds withdrawn from an account without authorization. For example, most cases of fraud and identity theft are committed using an access device, such as when an individual steals an older person’s debit card and pin number to withdraw money from a checking account.
- Keeping a comprehensive and accessible record of all financial documents, including bank statements, wills, and property deeds
- Appointing a reliable individual to manage financial affairs if incapacitation occurs. This legal arrangement ensures that financial decisions are made in the senior's best interest.
- Authorizing their bank to reach out to a designated trusted contact in case of suspicious account activity or communication difficulties
- Staying up to date on prevalent scams targeting seniors
- Frequently reviewing bank and credit card statements to detect unauthorized transactions
- Reporting any suspected abuse promptly
Connect with outside organizations and institutions
Beyond internal efforts, community banks should actively engage with nonprofit organizations, senior centers/retirement communities, senior advocacy groups, and educational institutions to extend the reach of their programs.
- Partner with AARP, local senior centers, and aging advocacy groups to co-host financial education events.
- Support initiatives like Meals on Wheels, where bank representatives can provide financial wellness resources to homebound seniors.
- Work with universities and community colleges to develop digital literacy workshops that teach seniors how to bank safely online.
The trends are positive
While recent data is unavailable, the American Bankers Association Older Americans Benchmarking Report (2021) indicated positive trends in the banking industry’s efforts to protect their senior customers. According to the survey:
- More than half of the banks surveyed offer products with terms that are favorable for older customers. More of the responding banks offer such products than ever before (60% in 2021 compared to 53% in 2019 and 59% in 2017).
- 99% offer training to customer service representatives on how to detect and report elder financial exploitation. The percentage of banks providing this type of training for both frontline employees and other staff has remained high throughout the three surveys the ABA Foundation has conducted.
- 93% report that they file a suspicious activity report (SAR), flag accounts, close accounts or report to Adult Protective Services (APS) when banks suspect elder financial exploitation. More banks are reporting to APS, rising from 62% in 2017 to 81% in 2019 and 78% in 2021.
Why it matters
As Older Americans Month approaches, community banks should take this opportunity to reflect on the importance of their senior customers and take meaningful action to protect and educate them. With financial exploitation on the rise, proactive engagement is not just a good business practice — it’s a necessary safeguard for a community bank’s very important customers.
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