Combating the exclusion of older people in the financial services market from the perspective of state institutions

https://doi.org/10.63189/EBWY4090

The phenomenon of financial exclusion, due to its multidimensional nature, has been the subject of numerous studies in recent years, which aim to assess the scale of its occurrence, the social groups it most affects, the most common causes of exclusion and the threats it carries. On the other hand, these studies remain an important suggestion regarding the need to take specific remedial actions, which will primarily prevent the occurrence of this phenomenon, but also improve the situation of people who experience financial exclusion in some aspect.

Combating financial exclusion requires, above all, systemic solutions related to, for example, the need to properly shape legal solutions that primarily support the security and stability of the financial system and related institutions. Recognizing and eliminating all forms of risk ultimately translates also into the security of non-professional participants in the financial market, their trust and greater activity related to the use of financial services. At the same time, we cannot forget about solutions that are intended to protect the consumer of such services, which, due to their specificity (related to the occurrence of risk), require a special approach to prevent, for example, the phenomenon of over-indebtedness.

Systemic solutions important from the point of view of the issue of financial exclusion also concern financial education, which, both at the level of formal and non-formal solutions, is an important factor in shaping the awareness of financial services consumers. This affects their stronger position in relations with professional financial market institutions, increases understanding of the mechanisms that are the basis for the functioning of the financial market, allows for the selection of services tailored to individual needs and possibilities and avoids unnecessary risk.

All legislative actions and implementation of systemic solutions require the activity of the state and public institutions, which is why their role in this process should be emphasized. It takes on additional significance in a situation where it is about reducing the scale of exclusion among people requiring support on many levels, when financial exclusion is, for example, a consequence of long-term unemployment, low income, disability, illness or concerns single parents. A group that requires special attention is also the elderly, who experience many barriers related to the use of financial services. In this case, involvement and cooperation with financial institutions is necessary due to the often indicated need to adapt the services they provide to the special needs of the elderly. Studies conducted in Poland show that the senior community most often chooses simpler banking services (in the form of primarily personal accounts and payment cards) and insurance (including life insurance, property insurance). Seniors also use savings accounts and bank deposits, less often consumer loans. The least popular among the elderly are investment funds and stock market investments, which require more knowledge and are associated with a higher risk of losing funds.

Among the factors influencing the use of financial services, older people most often mention: limited access to bank branches (ATMs), technological barriers, insufficient financial knowledge, fear of costs related to the use of financial services, insufficient offer of safe and simple products dedicated to older people, lack of trust in financial institutions. They also often indicate the complicated language of contracts and that used by employees of banks and other financial institutions, emphasizing the need to apply simplifications in this area and provide understandable and reliable information about the services offered. In the process of shaping the offer of financial products addressed to older people, attention should also be paid to their attachment to cash and traditional forms of banking.

The analysis of initiatives undertaken in Poland aimed at financial inclusion of various social groups, including the elderly, indicates significant involvement of public institutions. They regularly conduct research to assess the scale of financial exclusion in Poland and also undertake specific actions to prevent it. For example, in this case, we can indicate the activity of the National Bank of Poland (e.g. cyclical research on the payment habits of Poles, numerous educational activities), the Polish Financial Supervision Authority (e.g. educational activities drawing the attention of older people to the risks associated with investments in the financial market and the risk of fraud), the Office of Competition and Consumer Protection (information campaigns addressed to older people regarding, for example, trade shows), the Ombudsman (activities related to the protection of the rights of older people, analysis of cases concerning financial exclusion of older people in the context of access to bank branches and ATMs and limited access to certain banking services due to age, sending information on existing restrictions to the Polish Bank Association) or the Social Insurance Institution (information and educational activities, cooperation with financial institutions in the field of educational campaigns and offers of bank accounts addressed to Social Insurance Institution customers). It should be emphasized that public institutions whose activities are related to broadly understood finances, implementing the tasks assigned to them by law – influence the functioning of the entire financial system and related institutions. Consequently, their activities affect the situation of consumers of financial services, including the senior community. Their involvement in shaping legislative solutions is also important, which are often undertaken on their initiative and based on solutions developed by the working groups that represent them.

Taking into account the above comments, it should be emphasized that the multidimensionality of the phenomenon of financial exclusion and the need to undertake coordinated actions therefore require the involvement and cooperation of many public institutions. In Poland, many initiatives have been undertaken in recent years at the legislative and educational level, which have an impact on the scale of financial exclusion of various social groups. The situation and needs of older people are also noticed. However, these actions require continuation and the activity of the state and public institutions should be their basis, assuming cooperation with financial institutions providing specific financial services.

The activity of the state and financial institutions is of particular importance in the discussed case, taking into account the unfavourable demographic forecasts for Poland. Failure to take sufficient remedial action will, over time, intensify the occurrence of phenomena that are unfavourable from the point of view of the quality of life of the senior community, which inevitably also affects the functioning of the entire state and society. The ongoing demographic processes force new solutions on many levels, and examples include: the functioning of the labour market assuming longer professional activity of the elderly, the approach to financial education (formal, but also all its forms of supplementary nature), and the accumulation of retirement capital. The above-mentioned aspects are related to the analysed phenomenon of financial exclusion, but one should be aware of a much wider range of issues requiring attention and changes, such as the organisation of health care, which is also of key importance in the circumstances of the progressive phenomenon of ageing societies. The above-mentioned circumstances result in the need for analysis and a new approach to shaping the entire assumptions of the state’s social policy.