"New Seniors with Great Potential... Need for Customized Financial Services and Active Management"

[Asia Economy Reporter Yu Je-hoon] To target the 'New Senior (ages 51-64)' generation, who are major players in the financial market and more receptive to digital transformation compared to previous generations, the banking sector needs to provide customized financial services according to the needs of each demographic group, an analysis suggests.

According to Hana Financial Management Research Institute on the 22nd, the population in their 50s based on resident registration last year was 8.59 million (16.6%), the largest proportion among all age groups. As the population ratio rapidly increases, the YOLD (Young Old Led by Baby Boomers) industry is expected to grow to 168 trillion KRW by 2030, more than double compared to 2020.

In the financial sector, the New Senior group has established itself as a representative customer segment with high profit contribution. According to Hana Bank, customers aged 50 and above account for more than half of the total transaction volume, and their average transaction amount is about twice as high as those aged 40 and below, indicating a very high profit contribution. In particular, the transaction amount of income securities (trusts, funds, pensions, etc.) held by customers in their 50s is the highest among all age groups, showing a high level of engagement and proactiveness in financial transactions.

Unlike previous generations, they show a receptive attitude toward new transaction cultures such as digital channels. In fact, according to a survey conducted last year by the institute targeting 1,000 New Seniors, 83.3% of respondents used smartphone banking as their financial channel, significantly higher than branch visits (49.3%) and phone banking (23.1%).

Notably, the survey found that 64% had engaged in transactions with new financial institutions within the past year. The proportion of new institutions transacted with included securities firms (9.7%), Toss (6.5%), Toss Bank (5.8%), savings banks (5.5%), and Kakao Pay (5.4%), with securities firms and big tech/fintech companies relatively high. Existing financial companies such as KB Kookmin Bank (3.2%), Shinhan Bank (2.4%), and Hana Bank (2.2%) accounted for about half that level.

The New Senior group was analyzed to have different financial needs depending on their assets and income. Respondents with both high income and assets showed strong tendencies toward active investment and tax-saving demands, while those with low assets but high monthly income showed interest in financial products that can secure regular income for retirement. Those with high assets but low income tended to seek stable transactions and responded to lifestyle-linked services provided by financial institutions.

Only about 20% of the New Senior group had experienced senior-specialized platforms offered by banks, which is not a large proportion. However, among respondents who experienced such customized financial services, 74% expressed willingness to continue transactions with the respective financial institution, which is 1.8 times higher than non-experienced respondents (40.3%), indicating a considerable influence as a financial offer. This suggests a need for more active engagement with consumers.

Hana Financial Management Research Institute stated, "With the transition to digital finance, MyData services, and changes in the financial environment, the financial needs of those aged 50 and above, who are at a life transition stage, are also changing," adding, "Differentiated customized strategies and proactive management systems that consumers can directly feel must be established for them."