By Kari BarbicWith 10,000 baby boomers turning 65 every day, the number of Americans aging into retirement isn’t slowing down any time soon. Unfortunately, scams targeting seniors are on the rise as well, robbing older Americans of nearly $3 billion a year.
Banks across the country are on alert and adopting new strategies to help older customers protect their life savings and smoothly transition to retirement, according to a new survey by the ABA Foundation. The foundation set out to benchmark what banks of all sizes are doing to prevent and stop elder financial exploitation. Seventy percent of bank deposit balances are held by customers over the age of 50, according to survey respondents. As their valued customers have become prime targets for fraudsters, banks are finding themselves on the front lines of protecting their older customers.
Partnerships are key
“We are seeing a rising commitment from banks of all sizes to combat this critical issue,” ABA Foundation Executive Director Corey Carlisle says. “We’re finding that partnerships especially seem to be the ‘secret sauce’ for success when it comes to addressing elder financial abuse.” For example, more than 6 in 10 respondents report working with local law enforcement and Adult Protective Services to address suspicious activity. Banks are also building partnerships with other stakeholders in their communities to raise awareness and educate customers on the risks of fraud.
Montecito Bank & Trust saw a sharp increase in financial crimes targeting seniors in its community along California’s central coast. The bank went from seeing just two check fraud cases a year to two per month in 2015. Laurel Sykes and her team sprang into action: training staff, tracking the latest scams and educating their customers through brochures, seminars and additional account services. “If our employees can identify red flags right away, they’re in a position where they could stop the crime before it happens,” Sykes says.
The survey underlines how foundational employee training has become for banks of all sizes in tackling this issue. Seventy percent of banks require training for frontline staff, and nearly 60 percent require all their employees be trained in detecting signs of fraud and abuse. Pamela O’Leary of South Shore Bank in Massachusetts believes it is the bank’s duty to give employees the tools they need to help protect their customers. “We want our employees to feel valued and ready to do the best job they can to serve our clients,” she says. “If we put someone out there on the front line and don’t give them the tools to do their job, then shame on us.”
Tools of the trade
Use of technology in fraud detection
is also on the rise, allowing banks to spot suspicious activity much faster. Larger banks are at the forefront of the trend, implementing software and automated tools: Sixty-four percent of larger banks report using automated tools to track account activity, while 35 percent of smaller banks do. At South Shore, O’Leary says the bank’s tracking software and personal customer knowledge go hand-in-hand. “When we notice something unusual, we immediately invite the customer into the bank,” she says. “That way we can sit down together, look at what’s happening on the account to be sure the customer is aware and offer any help we can.”
With a generation far more likely to visit a bank’s physical location, customer relations can make all the difference in helping seniors protect their savings. More banks are offering special services to seniors including seminars, travel clubs, and account management tools. Nearly 60 percent of banks surveyed offer favorable account terms to seniors, and 23 percent offer special services and activities. “By offering a service that meets the needs and interests of this older clientele,” notes Sykes, “we can also provide education on fraud risk to empower our clients and help ensure they can confidently relax and enjoy their retirement years.”
Kari Barbic is a freelance writer in Washington, D.C.