# Early Behavioral Markers of Loss of Financial Capacity

## TL;DR

Banking data can reveal early signs of declining financial decision-making abilities in older adults, such as reduced spending on daily activities and increased financial vulnerabilities.

## Contribution

This study is the first to use banking data to identify behavioral markers of financial capacity loss and its association with financial vulnerability.

## Key findings

- Individuals with financial capacity loss reduced spending on everyday activities like clothing, travel, and hobbies.
- They showed increased financial vulnerability through more PIN resets, fraud cases, and lost/stolen cards.
- Online banking activity decreased, indicating reduced attention to financial management.

## Abstract

Can banking data reveal early symptoms of declining financial capacity and associated financial vulnerabilities?

In this case-control study, the financial behaviors of 16 742 donors of power of attorney bank registrations with a “loss of financial capacity” marker were compared with a matched control group of 50 226 individuals. The analysis of 344 transactional and nontransactional financial indicators revealed that in the 10 years before power of attorney bank registration due to loss of financial capacity, the donor group reduced their everyday activities, spent more time at home, and showed signs of increased financial vulnerability compared with the control group.

This study suggests that banking data can reveal behavioral markers and financial vulnerabilities associated with the loss of financial capacity.

Many conditions, including neurodegenerative diseases and psychiatric disorders, can impair financial decision-making in older age. Although banking data offer rich insights, they have not yet been leveraged to understand how the loss of financial capacity is associated with financial behaviors.

To describe the behavioral indicators of financial capacity loss and the association of financial capacity loss with financial vulnerability.

In this case-control study, banking data recorded by a major UK bank between January 1, 2009, and April 21, 2023, were used to compare the financial outcomes of a group of 16 742 donors of power of attorney (PoA) registrations with a “loss of financial capacity” marker and a control group of 50 226 individuals with no reported financial capacity loss that matched the demographic and socioeconomic characteristics of the donor group 10 years prior to their PoA registration. Group differences in financial outcomes were examined in the 10-year period leading up to the PoA registration. Analysis took place between December 2023 and December 2024.

Bank registrations of PoAs recorded between 2019 and 2023 for which the attorney reported that the donor lost financial capacity.

A broad range of 344 financial measures capturing day-to-day transactional activity (eg, spending on travel and hobbies) and other financial behaviors (eg, online banking logins).

The group of donors of PoA registrations with a “loss of financial capacity” marker comprised 16 742 individuals (mean [SD] age, 72.8 [8.5] years; 10 285 women [61.4%]), and the control group comprised 50 226 individuals (mean [SD] age, 72.7 [8.2] years; 30 657 women [61.0%]). During the 5 years prior to PoA registration, compared with the control group, donors were increasingly less likely to spend on everyday activities (clothing [difference, −9.1 percentage points (pp); 95% CI, −10.0 to −8.3 pp], travel [eg, hotels; difference, −9.6 pp; 95% CI, −10.5 to −8.8 pp], hobbies [eg, gardening; difference, −7.9 pp; 95% CI, −8.8 to −7.1 pp]) and more likely to spend on items associated with increased time at home (eg, household gas and electricity bills [difference, 5.1 pp; 95% CI, 4.6-5.7 pp]). Signs of heightened financial vulnerability in the donor group compared with the control group included an increase in the frequencies of PIN (personal identification number) reset requests (difference, 0.002 [95% CI, 0.002-0.003]), fraud cases (eg, animal charity difference, 0.0003 [95% CI, 0.0002-0.0003]), and lost or stolen credit or debit cards reported (difference, 0.005 [95% CI, 0.004-0.006]) and increased spending on charity (difference, 1.1 pp [95% CI, 0.5-1.7 pp]). In addition, the donor group exhibited reduced attention to finances compared with the control group via decreased online banking activity (difference in number of monthly online banking logins, −1.0 [95% CI, −1.1 to −0.8]).

This study highlighted the financial behaviors and vulnerabilities associated with declining financial capacity, such as a decrease in activity across multiple domains of daily life. These findings illustrate how banking data can reveal early behavioral signs and financial harms associated with financial capacity loss.

This case-control study uses banking data to describe the behavioral indicators of financial capacity loss and their association with financial vulnerability.