Gary Lewis Evans, the chief executive of B of I Holding Inc., says “the 20-year-olds are easy” to sign up for online banking.
That is why his Bank of Internet USA has taken aim at a different, but potentially more lucrative, demographic, with a Web site designed just for senior citizens, seniorbofi.com, which went live Jan. 5.
Analysts say seniors have little interest in online banking, but Mr. Evans says the senior market is wide open and that now is “a very opportune time to set up a senior Web site.”
He said one thing the San Diego-based Bank of Internet has going for it is that it has done similar segmentation before. “This demographic marketing, in our opinion, is our strength,” he said.
But analysts have their doubts about a Web site for older folks.
Ron Shevlin, a vice president with Forrester Research Inc. of Cambridge, Mass., said that though seniors have 41% of the country’s assets, they are the age group least interested in online banking.
Just 45% of U.S. seniors had Internet access in 2005, versus 83% of people under 30, Mr. Shevlin said. And of the seniors who use the Internet, only 33% — about 15% of the senior population over all — bank online. He defined seniors as anyone born before 1945.
Bank of Internet plans other specialized Web sites. It is building bancodeinternet.com, for the Hispanic market, and has registered the domain name boomerbanking.com. The senior site is its first for a specific age group. It also has Web sites for apartment building owners and apartment brokers.
Mr. Evans said his customers’ average age is just over 50, and that Bank of Internet hopes to build on its success reaching them in its efforts to attract even older customers.
He said that creating a Web page for seniors is similar to a traditional banking company’s building new branches to become established in a new community. “It’s our form of branching, so to speak,” he said. “We have a branch for this demographic.”
Mr. Shevlin said seniors “not only are much less likely to be accessing their accounts online … they’re just much less likely to be in the market for checking accounts.”
And though they do look for new savings products, he said, “these are not people who are looking to the Internet to do it.”
People of any age tend to look for financial products by brand name instead of by product type, Mr. Shevlin said, so having a senior site may not help Bank of Internet unless it can make its brand better known.
Large banks that offer online services to seniors rely on their branch personnel to promote those services, Mr. Shevlin said. Few older customers will start banking online “unless they’ve got some help or some incentive to do it.” Without the support of employees in a walk-in branch, “building a Web site for senior citizens, from a financial services perspective, seems to be an effort in futility.”
Mr. Evans said that seniors are not completely resistant to banking online and that banks have not done much to cater to them.
“It’s good to have a look and feel for the audience,” he said. “Most people would be very surprised at the seniors’ acceptance of online banking.”
Bank of Internet offers several banking products tailored to seniors. Features include the ability to set the size type from a set of large-print buttons.
“That’s a small thing, but it all adds up,” Mr. Evans said.
Another of the site’s features is a web log. Bank of Internet plans to moderate the diary’s postings, and the goal is to create a community built around the online banking site.
Mr. Evans wants the site to function as a portal for seniors, whose main exposure to the Internet may come through online banking. The site includes links to companies like Amazon.com Inc. and SeniorNet, a computer literacy organization.
“We see a great opportunity to communicate with our customers and allow them to communicate with us,” Mr. Evans said. Bank of Internet is thinking of adding audio and video downloads, or Webcam services.
Chris Musto, an analyst with Keynote WebExcellence, a division of Keynote Systems Inc. of San Mateo, Calif., said B of I should not put too much faith in its nonbanking features.
“Financial services in general has long found that people 50 years and older are where the money is,” he said, but companies have also found that customers of any age are not interested in using their bank as their door to the Internet.
Plenty of banks have tried to be Web portals, but “there is nothing in the history of online banking that suggests that it has ever actually succeeded,” Mr. Musto said.
“That doesn’t mean” that Bank of Internet “can’t make a lot of money servicing seniors online in a way that appeals to seniors,” he said, but it would probably be better off offering banking products that appeal to seniors than by linking to Amazon.com. “People come to their banking site to do their banking,” he said.
