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Are changes in banking making it harder for older people to access and protect their money?

There has been a number of changes to banking practices in New Zealand in the last few years. This article aims to highlight two in particular, the closure of local bank branches and changes in the code of banking practices, and examine the affect these changes have on older people.

Where have the banks gone?

Bank branches are closing down all over New Zealand. An article written in 2016 stated that in the previous 5 years over 150 branches of New Zealand major banks have disappeared. That number is climbing. Economist Shamubeel Eaqub has said branch closures are a commercial reality for small shrinking towns if they do not have enough business to keep banks interested. “We have moved much more to large scale banks and they are very commercially driven.”

Without being able to ‘pop’ down to a local bank has a big impact on many peoples lives. Losing these services means that someone has to either rely on technology and apps to manage their money, make a special trip to their nearest main center, or battle with the often frustrating phone systems. There are big assumptions being made that people are able to do at least one of these things.

The most recent bank that has been marked to close down is on in Martinborough. More than 100 people protested the closure of the ANZ branch. ANZ said that eight out of 10 Martinborough customers had not visited the branch in the last 12 months, additionally it had spent $200 million in the past four years installing and upgrading digital technology, internet and phone banking.  However, the protesters stated that some people in the community relied on face to fact contact. Older people residing at the local aged care facility often came down to the bank to do cash withdraws because they did not have the knowledge or the technology to use the digital services. However, bank closures do not only affect older people, business owners felt that SmartATMs just did not have the level of security banks did, especially for cash deposits. Their closest bank, 45 minutes away in Masterton, was the only option for people to do their day to day banking. What responsibility do banks have to the “two out of ten” people that do use their branches? Is this good enough?

Have you checked your terms and conditions recently?

In addition to banks closing down their branches, there has been another issue highlighted in the media recently. Banks have adopted a new code of banking practice that makes it clear consumers may not be covered for genuine internet banking fraud if they have breached their individual banks’ terms and conditions. Terms and conditions which banks are free to change at any time. The only other consumer protection is a general requirement – enforced by the Banking Ombudsman – for banks to be “fair and reasonable”. But what constitutes as fair and reasonable? Different banks appear to have different views. Here are a few different policies banks have:

ANZ customers could be liable for fraud losses if they bank from devices that do not have an up to date operating system and anti virus software.

BNZ customers could be liable if they include sequential numbers or letters in their internet banking username or password.

Westpac and ANZ require customers that use their banking apps to install software approved by “the relevant operating system provider” such as Apple or Google.

ANZ requires customers do not leave their mobiles ‘unattended’ and regularly change their pins and passwords, while making them still hard to guess, always remembering them and never writing them down. How often is regular? Experts say passwords should be changed every 90 days.

How does this impact on older people? We asked everyone in the office about their thoughts. The main issues that came out was around the access and knowledge of technology, impact of memory disorders, and potential for elder abuse.

With the wide publicity of scams, older people who may not be especially technology savvy may not know the importance of keeping software up to date, or may be weary of downloading updates, even from “trusted” sources. For someone who has memory problems, changing your password every 90 days without writing it down may be extremely difficult. What then happens if you are locked out of your account and your local branch has closed down? Also, without a local bank and knowledge of internet banking, older people may be more likely to hand over cards, internet banking access etc. to family members for help. While banks would discourage this action, it is the reality of life if older people are unable to manage their money themselves. Are banks inadvertently creating a level of dependency of older people on their more technology savvy family members? Also, does this increase the risk of financial abuse?

What is the answer?

Unfortunately banks are continuing to shut down their small town branches leaving groups of people unable to easily access their services. Some banks have introduced information and teaching sessions to help educate older people in particular in ways they can access their money through the use of technology. This will definitely help older people become more aware of their banks policies and ways to keep safe online, however it will still miss the portion of older people who cannot access or use the technology in the first place. An idea from the team was that to reduce the risk of financial abuse a person similar to an enduring power of attorney could be given permission to spend on behalf of an older person. However, you still come up with the problem of sharing your PIN with someone else which would breach a banks terms and conditions. Banks need to come to the table and think about effective ways to enable older people to keep control over their money.

About Eve Williams

Eve Williams is the Content Developer and Social Media Administration for Eldernet. She is currently studying towards her Masters at the University of Canterbury. She has a passion for learning new things.