When Canadian banks temporarily closed hundreds of branches in response to the COVID-19 pandemic, many seniors found themselves unable to pay bills, withdraw cash for groceries and manage their account balances.
The sudden break in banking routines has led retirement-aged Canadians to enroll in telephone and online banking in droves. But those isolating at home without a smartphone, tablet or computer have been unable to do basic monthly banking. They have been forced to depend on family members and friends to pay bills or withdraw cash, providing them access to their accounts through the ATM or online.
Canadians over the age of 65 have been slower than younger cohorts to embrace online banking. In 2019, before the COVID-19 pandemic upended the economy, 65 per cent of seniors did most of their banking online. That compares with more than three quarters of Canadians overall, according to a survey by the Canadian Bankers Association. The reality is that many seniors still find it easier and safer to speak with a representative the old-fashioned way: face to face at a branch.
“Because they don’t understand the internet that well, they worry that everything is a scam and they don’t have any trust in it at all,” says Bill VanGorder, vice-chair of the CARP National Board and former chair and senior spokesperson for CARP Nova Scotia. CARP is the country’s largest advocacy group for seniors.
“One of the few benefits of this situation is that it has opened the eyes of the banks and credit unions to the fact that the senior population was still not comfortable with online banking.”
To accommodate seniors who need to visit a branch, banks have reserved the first hours after opening to serve them. Access to local branches has been tightened as banks closed locations and asked customers to visit for critical needs only. For example, Royal Bank of Canada temporarily closed 40 per cent of branches, and Canadian Imperial Bank of Commerce temporarily shut 206 locations, or more than 20 per cent of its banking centres.
But for those seniors with health issues and isolating, in-person trips to places such as banks and grocery stores are not an option. Without the ability to speak with the local representatives that they have gotten to know and trust over the years, seniors have been forced to test out other banking channels.
Concerns over internet fraud and difficulty navigating unfamiliar digital platforms has long caused hesitation among seniors, but self-isolation is forcing the older generation into telephone and online banking all at once during the pandemic, according to Mr. VanGorder.
“The pressure and anxiety that this puts on them is probably worse than the fear of the virus itself," he said.
“In normal times, seniors have help from family and friends who take them to the bank or help them through the various processes, and that is not possible these days because of social distancing.”
Many seniors are now trying out telephone and online banking for transactions they typically would have done at a branch. From mid-March to mid-April, enrolment in online banking by seniors at RBC jumped 84 per cent. And digital activity by seniors who were already enrolled but had not been actively using online services over the past six months increased by 210 per cent, according to the bank.
Part of the issue is that many seniors still receive physical pension cheques and pay bills by cheque, says Rick Lowes, vice-president of retirement strategy at RBC. The inability to deal with those cheques "through their normal means of going to the branch … puts them in undue stress at this time,” he adds.
And making the transition to online banking is not easy, judging from the volume of recent inquiries. RBC call centres are fielding more than 40,000 calls a week from seniors asking for assistance with enrolling in online banking, transferring funds and paying bills.
To meet increased demand, Canada’s Big Six banks have introduced various measures to help seniors bank from home, from priority queuing at call centres to more advisers to help with telephone and online banking.
RBC implemented priority queuing at call centres to move seniors to the front of the line and mobilized advisers to reach out to customers who typically visit branches to offer assistance with telephone and online banking, Mr. Lowes says.
But many seniors depend on people they trust to help them do their banking during the pandemic, which has led some to explore options for family members to manage accounts on their behalf, such as creating a joint account or establishing power of attorney (POA).
While RBC is exploring remote verification technology and videoconferencing that will authenticate persons in a POA or joint account from a distance, the process currently requires account holders to visit a branch in person to verify identities and prevent financial elder abuse, Mr. Lowes says.
Seniors should first attempt telephone and online banking, if they are physically able, to maintain autonomy over their finances, says Léony deGraaf Hastings, a certified financial planner at deGraaf Financial Strategies.
“A senior may feel like they don’t really want someone else to [have access], but it’s the only way they know to get [their] money into the bank account,” she says. “So they may be forced to take risks right now that they may not be comfortable taking under normal circumstances."
If a senior has a family member or friend they trust, setting up a joint account or providing them with a POA will give them access to manage withdrawals, transfers and bill payments on the senior’s behalf. But if a joint account and POA are the only other options, then seniors and the other person involved should first be aware of the risks, Ms. deGraaf Hastings says.
A joint account gives the surviving account holder sole ownership of the account in the event of the other’s death – which could cause complications with estate planning. POAs that provide broad access beyond bank accounts could lead to mismanagement of finances if the agreement does not include specific limitations. They also vary between province and territory, and typically require a lawyer to implement.
And the alternative – divulging one’s password to allow a family member to access online accounts or ATMs through debit cards – could leave the account holder responsible in the case of fraud.
“It leaves them more vulnerable to theft or fraud if they’re forced to rely on others to help,” she said. “And for seniors that don’t have next of kin, they’re being forced to go into the branch and take extra risks.”
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