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Chapter 14 - Older Australians
14.1
The Committee recognises that to participate fully in the world of
electronic banking, citizens must have access to and mastery of the new
technology. Yet some consumers of retail banking services, particularly those
in regional, rural and remote Australia, feel as though they have not benefited
from reform or enhanced competition and that technology rather than carrying
them forward is leaving them behind. The report has considered a number of
obstacles that form real barriers to accessing electronic banking including the
absence of facilities such as ATMs, EFTPOS, computer terminals and telephones
in the community; inadequate infrastructure to support the delivery of the
service; and costs associated with purchasing the necessary equipment.
14.2 There are, however, other circumstances that hold people back from using
electronic banking notably inadequate education and training. This chapter
looks in greater depth at these impediments and uses the experiences of older
Australians to highlight some of the difficulties that discourage people from
using electronic banking in regional, rural and remote Australia.
Older people in rural, regional
and remote Australia
14.3
Older people are increasing both in number and as a proportion of the
total population. Over the last 100 years, the proportion of the population
aged 65 years and over has increased from 4 to 12 per cent and is projected to
rise to about 18 per cent by 2020.[1]
Moreover, they constitute a sizeable presence in rural and regional Australia.
14.4
Overall, according to the Bureau of Statistics, non-metropolitan regions
in Australia have populations older than metropolitan regions. It explained
further:
Many of the older inland SLAS [Statistical Local Areas] (those
SLAs with at least 16% of their population aged 65 years and over) were located
in the wheat-sheep belt to the west of the Great Dividing Range, extending from
the west of Spencer Gulf in South Australia, across to western Victoria
(particularly around Horsham), and along the Murray River into New South Wales.
There were more older SLAs just north of Wagga Wagga from Coolamon to
Coonabarabran, up to Bingara and into south-east Queensland, ending inland from
Hervey Bay.[2]
14.5
Older Australians in country areas confront the same difficulties as
other local residents in accessing banking and financial services. In some
cases, however, their problems are compounded especially since many are on low
and fixed incomes,[3]
are unfamiliar and intimidated by new technology, may have health problems and
have difficulties travelling. They appreciate the assistance, reassurance and
convenience of over-the-counter services.
14.6 The withdrawal of face-to-face services, therefore, places many older
Australians at a greater disadvantage. The need to travel provides just one
example of the increased difficulties faced by older Australians as banks
retreat from regional, rural and remote Australia.
Transport
14.7
Mr Chris Sidoti, former Human Rights Commissioner, noted that the lack
of transport in small rural centres means that it can be difficult for elderly
people to maintain an independent lifestyle or to remain in their home town at
all. He noted that in Victoria the Commission was told that ‘public transport
is almost non-existent in country areas’. He stated:
You can imagine the effect on a frail older person when a local
bank closes. If transport is virtually non-existent and the person is unable to
drive, access to essential banking services is not merely inconvenient—it is
impossible.
And it is not only getting to the bank, but also finding a
person to serve you when you do get there! With the increased use of Automatic
Teller Machines, people in country areas are forced at times to rely on a
machine without a teller being available to answer questions or even explain
how to withdraw money from your own account.[4]
14.8
Many submissions also made this general observation about the difficulty
faced by older people in having to travel to the nearest town to do their
banking. The Local Government Association of Tasmania stated that very few
remote areas provide transport services between towns and customers are
physically not able to get to their nearest branch for more detailed
information with regard to their finances. Councillor Smith from the Boonah
Shire Council referred to a small town in the district, Kalbar, where the
National had closed leaving residents without banking facilities. He noted that
there was no public transport and elderly people ‘getting into Boonah to do
their banking for their pension cheques was almost prohibitive and they had to
rely on family to get them in’.[5]
14.9 Many local councils recounted the experiences of older Australians
suggesting that as more and more services become automated and electronically
delivered, they may be increasingly blocked from accessing essential services.[6]
Yet, as shown in Chapter 6, ADIs place a heavy reliance on alternative service
channels to compensate for the lack of over-the-counter services, and older
Australians form the very group that is less likely to adopt new ways of
banking.
14.10
This chapter first examines the use of modern technology by older people
and then seeks to understand the reasons some are not taking advantage of the
new ways of banking. It looks at:
- their strong attachment to old ways and their unfamiliarity with
new technology;
- their level of financial literacy; and
- physical barriers to accessing new technology such as poor
eyesight or failing health.
Older Australians and the use
of new technology
14.11
A recent survey of adult financial literacy in Australia found that
people aged 70 and over were among the groups less likely to use or know how to
use ATMs, EFTPOS, telephone banking and Internet banking.[7]
These statistics take on greater significance for this group living in
regional, rural and remote Australia because of the difficulties already facing
people in country Australia with the decline in the provision of traditional
bank services and the increasing emphasis given to self-service banking.
14.12 The following table, based on a recent survey of adult financial
literacy, substantiates the anecdotal evidence presented to this Committee. It
shows clearly that older Australians as a group are less likely to use or know
how to use new technology.
Table
14.1—Use and knowledge of ATMs, EFTPOS, telephone banking and internet banking
by age[8]
|
The following questions were
put to participants in the survey:
A1. There are various
ways of paying for goods and services. Which of the following payment methods
do you, yourself, use?
A2. IF DOESN’T USE,
ASK: What other payment methods do you know how to use, even if you don’t use
them yourself?
|
|
Demographic Profile for ATM Knowledge
Response – Use or know how to use ATMs: 91%
|
|
Age
|
%
|
Age
|
%
|
|
98
98
97
|
- 60-69
- 70 and over
|
81
66
|
|
Demographic Profile for EFTPOS Knowledge
Response – Use or know how to use EFTPOS: 89%
|
|
Age
|
%
|
Age
|
%
|
|
98
97
97
|
|
77
54
|
|
Demographic Profile for Telephone Banking Knowledge
Response – Use or know how to use telephone banking:
68%
|
|
Age
|
%
|
Age
|
%
|
|
81
78
|
|
49
37
|
|
Demographic Profile for internet Banking Knowledge
Response – Use or know how to use Internet banking:
52%
|
|
Age
|
%
|
|
%
|
|
64
68
63
|
|
29
16
|
|
|
|
|
|
|
|
|
14.13
Statistics from the ABS, which concern the actual use of the various
service channels to pay bills or move funds, present a stark representation on
the extent to which older Australians lag behind their younger cohorts when it
comes to using new technology. The data in table 14.2 shows the low percentage
of people over the age of 65 years who use electronic commerce.
Table
14.2—Adults Undertaking Internet and Selected Electronic Transactions for
1998–2000 and 2000 by age groups[9]
| |
Total no.
of adults
|
Paid bills or transferred funds via the Internet
|
Paid bills or transferred funds via phone
|
Paid bills or withdrew funds via EFTPOS
|
Transferred or
withdrew funds via ATM
|
|
|
‘000
|
%
|
%
|
%
|
%
|
|
1998
|
13 429
|
1
|
35
|
61
|
69
|
|
1999
|
13 589
|
3
|
40
|
63
|
71
|
|
2000
|
13 840
|
9
|
50
|
66
|
74
|
|
|
|
Adults undertaking Internet and selected electronic
transactions for 2000 by age groups
|
|
|
Total no.
of adults
|
Paid bills or transferred funds via the Internet
|
Paid bills or transferred funds via phone
|
Paid bills or withdrew funds via EFTPOS
|
Transferred or
withdrew funds via ATM
|
|
Age group (years)
|
‘000
|
%
|
%
|
%
|
%
|
|
18-24
|
1 843
|
9
|
49
|
83
|
89
|
|
25-34
|
2 815
|
14
|
63
|
84
|
90
|
|
35-44
|
2 887
|
12
|
59
|
79
|
85
|
|
45-54
|
2 532
|
10
|
53
|
66
|
75
|
|
55-64
|
1 681
|
6
|
42
|
49
|
60
|
|
65 or over
|
2 083
|
*1
|
22
|
26
|
32
|
14.14 The following data produced by the ABS focuses on the use of the Internet to pay bills or transfer funds. While it shows that over recent years the number of older Australians using the Internet to pay bills or transfer funds has gradually grown, there is nonetheless a sharp drop in the number of people aged 55 or above using the Internet for such purposes.
Table 14.3—Paying Bills or Transferring Funds via the Internet according to age group: 1999–2002[10]
|
Persons Paying Bills
or Transferring Funds via the Internet
|
|
Age
|
1999
|
2000
|
2001
|
2002
|
|
|
‘000
|
%
|
‘000
|
%
|
‘000
|
%
|
‘000
|
%
|
|
18–24
|
52
|
3
|
162
|
9
|
325
|
17
|
509
|
27
|
|
25–34
|
129
|
5
|
391
|
14
|
734
|
25
|
1 046
|
36
|
|
35–44
|
100
|
3
|
364
|
12
|
665
|
23
|
869
|
30
|
|
45–54
|
72
|
3
|
256
|
10
|
447
|
17
|
622
|
24
|
|
55–64
|
*18
|
*1
|
101
|
6
|
168
|
9
|
263
|
14
|
|
65 or over (a)
|
*7
|
-
|
*20
|
*1
|
-
|
-
|
84
|
4
|
|
* estimate has a
relative standard error of between 25% and 50% and should be used with
caution
- nil or rounded to
zero
(a) Persons aged 65
years or over not in scope in 2001.
|
14.15 As mentioned earlier, new technology has much to offer consumers
especially older people living in country Australia. In particular, it would
relieve them of the burden of travel or relying on others to do their banking
and be a much safer and convenient way to conduct banking. The following
section examines the reasons older Australians are shunning new technology.
Strong attachment to
traditional banking
14.16
Older Australians are accustomed to face-to-face banking and according
to evidence many avoid self-service banking facilities. For them
over-the-counter services offer security and peace of mind and they
particularly value the personal contact.[11]
14.17
The Winton Shire Council informed the Committee that it is a small,
remote community in outback Queensland with a population of around 2,000
including a lot of older members of the community. It maintained that the older
residents have a ‘greater expectation of face-to-face service and are more
resistant to technology’. It asserted that ‘there is a definite need for a
provision of traditional banking format, because of the desire for a
face-to-face contact from an older and conservative community’.[12]
14.18
The Narrandera Shire Council expressed the views of many councils when
it stated that despite the advances in technology, ‘face-to-face banking
remains an important service, particularly valued by the elderly’.[13]
Similarly, the Manilla Shire Council maintained that a vast number of its
graziers and farmers and senior citizens are not familiar with using the
Internet at all. It added:
Further they are not accustomed to using an impersonal piece of
technology for performing their banking and financial actions and needs, when
these functions were (not that long ago) fulfilled by warm, caring and friendly
bank personnel.[14]
14.19
The Post Office Agents Association Ltd agreed with this view. It
submitted that the elderly and less mobile continue to prefer the use of
passbook accounts requiring physical access to financial institutions either
directly or through their agents.
Older Australians navigating
electronic banking
14.20
The preference for over-the-counter service derives not only from a
strong attachment to the traditional and familiar way of banking. Many older
Australians are intimidated by change and not all have the level of confidence,
skill or competency to master the new technology.
Proficiency in using new technology
14.21
Many witnesses referred to people’s lack of confidence in using modern
technology such as telephone and internet banking.[15]
The Country Women’s Association of New South Wales noted that e-commerce,
Internet banking and telephone banking all rely on the competence and
confidence of their users. It asked, ‘Do the CEOs of our major banks understand
that ours is an ageing society, that many people fear and resist change, even
when they have the tools to embrace it?’[16]
Councils in particular were aware of residents who have difficulties adjusting
to new technologies, are intimidated by the technology and confused and
unnerved by the rate of change. According to the District Council of Robe many
people who are unfamiliar with the technology (especially the elderly) fear the
new and different ways of banking.[17]
The Holroyd City Council observed that not all banking customers are equipped
for or comfortable with electronic banking.[18]
14.22 The Shire of Woodanilling, the Shire of Laverton and the Council of the
Shire of Cardwell also referred to the difficulties experienced by older
Australians who may find the new banking technologies and non-traditional means
of carrying out personal banking services confusing and hence difficult to
access.[19]
14.23
The view of the Latrobe City Council was typical of a number of community
groups in suggesting that many country people ‘feel that they are exposing
themselves to ridicule by indicating they are computer illiterate, and do not
appreciate that in a mature age population some 60% of their age have never
needed to access this technology’.[20]
14.24 This concern about the proficiency of older people in using new
technology was a dominant theme in the evidence presented to this Committee and
is reflected consistently throughout this report.[21]
Mr Christopher Francis is only one of a number of community representatives who
highlighted the difficulties facing people in adopting to new ways,
particularly the older members of society, who have not grown up with computers
and other electronic forms of communications. He explained:
First of all I have to have a computer and a modem. I then have
to get to the site and log online. I then have to put in my card number or my
bank number, my password and my security password. Imagine what a 75-year old
person, with no exposure to a computer, is going to make of that. Unless you
train people, unless you educate people about the use of the technology and
show them that there is some benefit in it, they are not going to be
interested.[22]
14.25
Councillor Lykke made a similar observation about older Australians and
electronic banking. He told the Committee:
They will learn little bits of it, but it is never going to be
convenient to them—they are going to feel alienated all the way. I think that
whenever we set up some system for a community we should be looking at the
lowest common denominator and asking: can that be done? I do not expect that
someone who is over 80 years of age and is starting to forget what their name
is needs to have all those facilities...
It has been my experience that when you start to make things
complicated there is always that sector of the population that drops off. [23]
14.26
A number of witnesses also spoke of people’s unwillingness to take up
electronic banking because of security concerns about the integrity of the
system and about their own safety when using electronic banking. Mr Francis
told the Committee that ‘rural and regional people are more concerned, more
conservative, and are probably not going to want to risk doing online banking
if they are going to lose their money to some hacker overseas somewhere’.[24]
The Financial Services Consumer Policy Centre wrote:
The elderly are reluctant to use ATMs and EFTPOS services on
grounds which include; confusion about differences between debit and credit
cards, concerns about personal safety when using ATMs and EFTPOS, and suspicion
about reliability of technologies, including over the phone services. The
elderly also worry that machines may swallow their cards, are in constant
anxiety about forgetting their PIN numbers.
Risk of financial exclusion
14.27
The Committee is concerned not only with people missing out on the ease
and convenience of accessing electronic banking but the longer term possibility
of such people being effectively excluded from basic services and information.
Professor Alice Tay remarked that ‘information technology has the dual
potential to disadvantage and marginalise those who “miss the technology bus”
and to benefit and enfranchise those who catch it’.[25]
As quoted previously, Dr David Morgan, CEO, Westpac, observed that ‘technology
might empower people but it also adds to the feeling of powerlessness. It has
dehumanized what has been a very human business’.[26]
14.28
As access to banking services becomes increasing reliant on new
technology for its delivery, older Australians struggle to adjust to the
changes. There is a real likelihood that as a group they may ‘miss the
technology bus’ and thereby become stranded from mainstream banking. The
Committee has found no evidence that banks have with commitment and
determination set about ensuring that older Australians are on board the
technology bus.
Education and training
14.29
Despite all the assurances given by the banks that they have in place
initiatives designed to assist people to use the new technology, people are
still reluctant, even refusing, to adopt it. Witnesses highlighted again and
again the need for improved education and training programs especially for
older Australians.[27]
14.30
Local Councils, who are well placed to understand the needs of local
residents, underlined the importance of adequate training for older
Australians. For example, the Shire of Dandaragan, as did many, noted the need
for further training programs for seniors.[28]
The Council of the City of Ballarat recognised that the adoption of new
technology depends to a large extent on education and training that enables the
user to access the service. The East Gippsland Shire Council endorsed the view
that there was a need for educating rural communities in the use of new
technologies and assuaging the inherent fear in relation to ‘virtual money’.[29]
Many submissions, however, referred to the paucity of training for client
users.[30]
14.31 Mr Charles Burke, NFF, told the Committee that while people want to
embrace new technology if it is available, the problem exists of simply having
people to educate them in its use.[31]
He added:
In regional Australia...we are still talking about a whole host of
banking operations that are done across the counter. If you have had that taken
away from you and you are a bit slow to pick up on the inert technology that
can be quite daunting.[32]
14.32
The Rosalie Shire Council, the Latrobe City Council, the West Tamar
Council, and the East Gippsland Shire Council were not alone in calling for
more and improved training programs and for the technology to be user friendly.[33]
Building confidence in the use of new
technology
14.33
Without question, more attention needs to be given to education and
training in the use of new technology. Such programs should go beyond the
mechanics of enabling an individual to master the technology—they should be a
means of engendering confidence in the system and providing motivation for
people to take up the new technology. In other words, banks need to persuade
their customers that firstly the new technology offers them real advantages and
secondly that there is no mystery to the new technology and they will be able
use it with confidence.
14.34
Mr Clinton Weber, CEO, Rosalie Shire Council, raised an important point
about the approach of the banks to encourage their customers to embrace
electronic banking. He noted that there is a difference between training so
that people understand how to use a product and selling that product. In his
view, ‘I see a lot of the selling but I do not see too much of the training.’[34]
14.35
Becoming a confident user of new technology takes time. The South
Australian Country Women’s Association suggested that the expansion of banking
facilities through non-traditional channels including new technologies must
take place slowly as technologies that change too quickly are not handled well
by people. They need time to accept and absorb the information.[35]
14.36 Along similar lines, the Latrobe City Council urged the banks to adopt a
public relations approach and provide training sessions in rural and regional
communities for the benefit of their clients.[36]
Councillor Burgess told the Committee:
If the banks could take some sort of responsibility—even if they
just put dummy teller machines in banks before they closed so that the senior
citizens especially could have the chance to learn to use these machines—it
would make a difference. It sounds like a very simple thing, but for someone
who has never used this technology to have to suddenly start to use the likes
of EFTPOS machines et cetera it is a very difficult thing. If banks were to
provide some sort of serious training—and not just tokenism—for everybody which
enabled people to come in to learn to use these machines over a period of time
before they pulled their services out, I am sure the effect on communities
would be less.[37]
14.37
The Catholic Women’s League argued that the older generation at present
is ‘finding internet banking a steep learning curve, it would be in the banks’
interest to hold classes in regional and rural areas on Internet banking to
assist customers’.[38]
Some, however, do not regard the problem as a straightforward training matter.
Mrs Zerbst, Secretary, Nanango Progressive Community Ltd, told the Committee
that no amount of training is going to get the elderly or frail and elderly to
‘even use an ATM, let alone use a computer, or even telephone banking’. She
stated:
They just find it impossible. They really want to walk in
somewhere and hand their passbook over and feel safe and secure.[39]
14.38
The Committee accepts that winning older Australians over to the side of
new technology is a challenge but one that needs to be taken up in earnest. In
some cases, local councils are stepping in to make up for the shortcomings in
education and training. Mr Christopher Francis, City of Ballarat, told the
Committee that his Council provided free tuition in computing for people but at
a local level. He stated further:
I do not see the financial services people coming to us with
$50,000 to say, ‘Let’s help you out to educate the community about how to use
our services’...Are we there to educate people about how to do their online
banking? Once again, local government is being forced to take on a role which
really we do not believe we should have.[40]
14.39
The Rosalie Shire Council provides another example of a council that has
accepted the responsibility for providing both the equipment and the
encouraging environment in which residents experiment with and gain confidence
in using the Internet.[41]
14.40
The current code of banking practice recognises the needs of elderly or
disabled customers to have access to transaction services and undertakes to
take reasonable measures to enhance their access to those services. It,
however, does not mention any commitment to the education of its customers.[42]
14.41
The Committee believes that the education of consumers in using and
adapting to electronic and remote access channels is of paramount importance.
Clearly, the quality and level of education and training offered to consumers
is falling short of expectations. The resounding message from local councils in
particular is that the banks have failed to equip some of their customers with
the skills and confidence needed to effectively use new technology. The
evidence before the Committee suggests that the banks have not given attention
to practical hands-on training where customers can experiment with new
technology without fear of embarrassment or mistakes.
14.42
The Committee also is aware of the importance for customers to know that
there is a safety net available if needed should they experience difficulties
in using electronic banking. It believes that where a bank does not have staff
readily available to offer their customers face-to-face service that they look
carefully at devising methods that will compensate for this lack of direct
contact. One of the first areas may be to explore ways to improve service
delivery in the form of direct phone access to a help desk, keeping in mind the
special needs of the elderly and the difficulties they may experience in
navigating their way through the steps needed to complete a transaction. This
means that assistance should go beyond helping a customer complete a
transaction but is designed to reassure, encourage and educate customers in the
use of new technology and should include with the customer’s consent follow-up
action by the bank to ensure the customer is managing electronic transactions.
14.43 As people age they become susceptible to poor health. Education and
training cannot compensate for the difficulties in accessing electronic banking
that accompany failing health, particularly poor eyesight and hearing. There is
a heavy onus on those developing new technologies to take account of the
special needs of the various sectors of the community when designing equipment
and software.[43]
14.44
The Committee believes that promoting equitable access to financial
services for all Australians is an important public policy goal. It notes that
the banking industry is aware of the difficulties facing older Australians and
people with a disability in accessing electronic banking and has taken the
first step in formulating industry standards designed to make the use of
electronic banking easier and safer for all. The development of these industry
standards was covered in chapter 11. Similar standards have been developed
governing telephone and internet banking.
14.45
In recommendation 12, the Committee urged all ADIs to place a high
priority on ensuring that country people are not the last on the list to
benefit from the implementation of these industry standards. It recommended
further that the ABA monitor the implementation of the standards in regional
Australia and make public its report on the initiatives to improve
accessibility for older people in country Australia (see p. 180). The
circumstances of older Australians in regional, rural and remote Australia
underlines the importance of these recommendations.
14.46
The Committee accepts that older Australians living in rural, regional
and remote Australia have special needs that over-the-counter services would
address. It recognises, however, that face-to-face service is not going to be
available in all areas. Easy and affordable access to the alternatives then
becomes most important. The evidence shows that the banking industry could do
more to assist their customers especially the older ones to adjust to changes
in service delivery.
14.47
A multi-pronged approach should be taken by ADIs to improve people’s
understanding of the technology and how to use it.
Recommendation 18
The Committee recommends that ADIs:
- expedite the introduction of industry standards as recommended
in chapter 11—standards have also been formulated for telephone and Internet
banking;
- allow sufficient time for people to experiment with and become
accustomed to the new technology and for the banks to monitor the transition so
that adjustments can be made in light of any difficulties during this phase;
- offer hands-on training and education programs—the suggestion
from the Latrobe City Council about the use of dummy machines is a practical
and sensible idea and illustrates the range of options available to ADIs to
explore in structuring programs to assist their customers adopt new ways of
banking;
- work in close partnership with local community groups,
particularly the local council, to implement strategies to entice older
Australians to use modern technology when banking;
- provide education and training programs that focus not only on
proficiency in using new technology but on confidence building in the
technology itself; and
- ensure that there is on-going and easily accessible support to
help people who may be struggling with the technology or loath to use it.
Recommendation 19
The Committee recommends that the Australian Bankers’ Association
amend their current code of practice to include the commitment that banks will
take all reasonable measures to educate customers on the use and benefits of
accessing banking services through new technologies. Further, that the code
will offer practical guidance on some of the measures that banks could take to
ensure that they are effective in meeting this commitment. They could include
examples taken from recommendation 18.
14.48
The Government and the banking industry share the responsibility for the
development and implementation of an educational framework that will encourage
people of all ages, from all walks of life and in all localities to use new
technologies. This chapter has focused on the responsibility of the banking
industry to ensure that their customers are well equipped to take advantage of
new technology for their banking business. The following chapter continues this
discussion but also looks at the role of government in improving the financial
literacy of Australians. To do so, the Committee looks at another group in the
community, Indigenous Australians, who experience particular problems in
gaining adequate access to banking and financial services.
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