NEEDHAM, MA, October 4, 2007 – Ten thousand Americans are turning 60 every 24-hours. The threat of financial fraud targeting this population is increasing given the large proportion of investable assets owned by this fast-growing demographic segment. Legislators and regulators are beginning to require that financial institutions take special steps to protect these customers.
New research from TowerGroup explores the growing requirements for financial services institutions to recognize and report suspected exploitation, as well as the opportunity for institutions to differentiate themselves by providing a higher level of assurance to this population segment to earn their trust.
Formal tracking of elder abuse in the United States by the National Council on Aging and other agencies finds that financial exploitation is as significant and damaging as other types of abuse. Unlike physical abuse, from which a victim can often fully recover once the abuse is put to a stop, financial fraud can result in permanent damage – that is, the loss of the victim’s financial independence at a time where he or she has no means of rebuilding a retirement nest egg.
TowerGroup finds that new laws protecting elderly customers should not be viewed by financial institutions as yet another regulatory burden. Rather financial institutions should recognize the opportunities arising from this emerging issue, both to make stronger connections with customers and to leverage existing technologies and processes:
- An institution can position itself as a marketplace leader with older adults in providing superior protection as well as managing and growing their financial assets.
- The institution can provide this higher level of service quality without significant additional investment in new technology, by leveraging its existing anti-fraud and other compliance technologies.
- Stopping exploitation and fraud against the elderly requires ongoing, enterprise-wide training. Since all fraud management and compliance needs involve people, process, and technology, institutions should leverage existing training processes and tools to add expertise in preventing fraud.
The new research, titled “Elder Abuse Regulations: Reporting Burden or New Opportunities for Financial Services?,” by Rodney Nelsestuen – a senior analyst in the TowerGroup Financial Services Strategies & IT Investments practice – is available to qualified members of the press for review.
At TowerGroup, Nelsestuen’s research covers all aspects of business and IT strategies, emerging trends, growth strategies and issues germane to the financial services industry.
About TowerGroup
TowerGroup is the leading research and advisory services firm focused exclusively on the financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world’s leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America and Europe, TowerGroup serves a global client base. Visit www.towergroup.com for more information.
