Will we see an increase in the number of “incapacitated” older persons as a result of digitisation of financial services?

Trying to retain control

In my job, I regularly hear touching testimonies of older persons complaining that they face huge difficulties to keep control of their own life because the only options available for them to manage their assets are now digitalized. With the rapid ageing of Europe’s population there will be growing numbers of individuals forced to rely on someone else, be it a close relative, to access their money or pay their bills. “While I fully trust my son, I have lost my dignity and feel like a young child who is supervised to ensure he is not wasting his weekly allowance on sweets or silly gadgets.”

A new development is also making me wary: next September 14th, a new European regulation will enter into force, the so-called Strong Customer Authentication or SCA which seeks to improve customer security and reduce fraud in online card payments above €30 where both the payer and the payee are based in the European Economic Area (EEA).

While the intention behind this new regulation is very laudable and should be welcomed by everyone, consumers and retailers, its implementation will require online shoppers to have a smartphone in order to be able to use their debit or credit card for shopping. Indeed, in order to reinforce authentication, the details printed on the card will no longer be sufficient and the payee will have to provide an additional form of identification out of three identified options: something card holders know such as a password or PIN; something card holders have such as a smartphone; or something card holders have such as biometrics (fingerprint or face recognition stored on a smartphone).

Risk of exclusion

This is an important development in the digitalization of financial services. However, it makes me wonder if the risk of financial exclusion of older people - among other groups at risk of being digitally excluded - is going to increase.

And this really worries me because at the same time I hear and read that new initiatives are taken by policy makers to better “protect” persons who are considered to be “incapacitated” because they cannot or can no longer make rational decisions about their daily life or manage their assets.  

Instead of addressing accessibility issues that create barriers for persons with functional limitations, I fear that some might jump to the conclusion that older persons who either do not know how to use or do not trust online banking and mobile payment facilities, or just cannot afford to buy a PC or a smart phone, should either chose a third party they trust to manage their finances for them or be declared incapacitated so that someone else would be designated to manage their finances for them. 

Working together to prevent crisis

The recent G20 endorsed the Fukuoka Policy Priorities on Ageing and Financial Inclusion which include a commitment to “tackle financial abuse and fraud of older people through identifying problems quickly and using a multipronged approach to prevent older persons from becoming victims of financial abuse and fraud”.  

This is a situation the vast majority experience as the most severe form of intrusion into their privacy, and a violation of their fundamental right to autonomy and independence, as well as a well-known risk of financial abuse and fraud.

The newly adopted European Accessibility Act covers digital financial services. Member states now have to implement it. I can only urge them to involve older persons when defining accessibility criteria, and I encourage older citizens across Europe to campaign together for accessible digital financial services to ensure no one will be left behind!  

Anne-Sophie Parent is Secretary General of AGE Platform Europe