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Banking on a long life: longevity as a financial service

Published on 23/05/2020

Quite a few new digital financial services are challenging traditional banks by targeting niche groups of customers. The theory is that they stand a better chance of getting people to switch banks if they aim tailor-made services at groups who feel they are being under-served.

The danger of putting too many eggs in one basket is that the target group may be too small to achieve substantial growth. What about people who want to live for a long time in the best possible shape? This is the target group of an enterprise called Longevity Bank – which doesn’t yet have a banking license but is applying for one in the UK and is poised to ask for a Swiss fintech license.

Longevity may seem a curious subject in the middle of a pandemic that has a higher mortality rate among the elderly than other age groups. But maybe this makes longevity a more compelling subject right now.

The Longevity banking project is part of an international group, which includes a Hong Kong entity called Deep Knowledge Ventures – that operates the investment fund Longevity Capital out of Switzerland – the London-based Longevity Fintech Company, plus an array of analytics, artificial intelligence, DeepTech and research arms focused on gerontology.

On the face of it, Longevity looks like it is trying to attract pensioners. Who else is interested in financial services dedicated to supporting a robust standard of life in advanced years? But the firm is also banking on younger people wanting to live a long life – and who are already planning ahead.

Many existing banks have analysed the implications of longevity and the failure of birth rates to keep up (ageing population). People will need to make their pensions and savings stretch further whilst spending more on healthcare and worrying about passing on assets to the next generation.

Banks are focused on persuading clients to better manage their finances and plan ahead whilst creating investments that are profitable in an era of low interest rates and creaking pension schemes.

It’s one thing identifying a target group, quite another to match their expectations. So how will Longevity win over a wide cross-section of society that are wary of gimmicks and fancy marketing? It will surely take more than catchy slogans such as: “Health is the new Wealth”.

Longevity investments

The proposed Longevity Bank, which is aiming for a Swiss launch early next year, says it will offer digital banking services along the lines of N26 or Monzo. But it also wants to connect clients with healthtech. This will involve a rewards points scheme for people who can show they lead a healthy lifestyle and are prepared to share data with the bank.

Customers will also have access to a so-called “Longevity Marketplace” of vetted health and medical products and services.

The planned bank will be backed by the Longevity Capital fund, which hopes to raise around €200 million (CHF212 million) in assets by the end of 2021. Longevity Bank says it also plans to support other banks that want to offer longevity focused banking.

The success of Longevity’s strategy may hinge on the willingness of people to be monitored, share their data and be directed to the “best” life enhancing investments. It also appears best suited to people who not only aspire to a long and healthy life but who tailor their lifestyles to this pursuit.

But ask most people about living a long and healthy life and most will probably say it is a lot more than a niche ideal.