73% of the UK's population has now moved to online banking
The past 18 months have been exceptionally hard for thousands of people across the UK, with many feeling less financially secure than at any point in living memory. In a recent survey from Forbes Advisor UK, 69% of respondents said that Covid-19 and its effect on the economy has made them more careful about money.
As the pandemic forced numerous industries to close physical locations, many of us switched to online services and this has been especially evident within the financial services sector. In fact, a survey by SRM Europe’s Customer Loyalty research discovered that 73% of the UK’s population has now moved to online banking.
In this month’s comment, I explore how the fintech revolution has provided improved access to ethical finance without geographic barriers.
The rise of digital banking Back in April, The Times discovered that bank visits had dropped by a third when compared to the same time in 2020. Similarly, according to the ONS, 10% of banks had closed at the second-fastest rate in a decade. These developments indicate a change in opinion towards banking and, in turn, financial suppliers are having to adapt their services to meet this new demand.
This transition was already taking place before the pandemic took place. Covid-19 merely accelerated the change, with many people having no choice but to adopt online banking. The pandemic made us more expectant of the immediacy of services, especially at a time when leaving the house was either forbidden or certainly felt a most risky endeavour than pre-pandemic. This was especially prevalent in rural communities, where they may have had to travel to their nearest town in order to access their finances, with the Independent sharing that a quarter of people in rural areas did not have access to a free cash within 2km of their home.
Other things for people to now consider is whether their bank aligns with their own values and beliefs. In recent times, there has been a particular focus on where banks are putting their money, with The Guardian reporting that 60 of the world’s biggest banks had provided $3.8tn for financing fossil fuel companies.
Which? research has shown that 95% of people don’t know what their bank is doing to reduce its carbon footprint, with 47% saying that it was important to them that their financial supplier has policies towards sustainability. Fintech means that people are no longer bound to their physical location, allowing many to access banking that is greener, fairer and more adaptive to their needs, rather than choosing to bank with the branch which is closest to their home.
The future of fintechThe digitisation of banking shows no signs of slowing down, making fair and ethical finance more accessible than ever before. The UK is now considered to be one of the leading countries in fintech, for its innovative and ambitious use of technology to change the banking landscape. The UK is investing record figures into the fintech industry, second only to the US, with almost £18bn of deals in the first half of this year according to The Guardian.
To continue to scale the industry, we will have to continue to focus on security within online banking to prevent data from being leaked. In a study with Statista, 46% said that they had concerns about online payments, with 44% saying that they were worried about the misuse of their personal data. On the other hand, it can be safer to use mobile or contactless payments than to carry cash as this leaves people open to mislaying funds or having their money stolen.
Access to affordable finance has never been more important, helping to reduce poverty and allowing people to get back on their feet following the Covid-19 lockdowns. It also provides the opportunity for economic growth, supporting the country to build back better in the years to come.
Meeting our members’ needs Here at Great Western Credit Union, we have developed our digital platform to meet our members’ needs, making services quicker, more reliable and available across a broad region of the South West. We are the first choice for regionally-focussed ethical and affordable finance, helping safeguard our communities from the burden of high-cost debt. With our merger with Wyvern Savings and Loans complete, we can now serve thousands of people across the South West, including Bristol, Bath, Gloucestershire, Dorset and much of Somerset and Wiltshire.
Our services help to build the financial resilience of the region, with money reinvested in local people, businesses and economies. We also provide aid to people who need it across the world, as evidenced in our Social Impact Report which details our support in resettling 73 families through the Vulnerable People's Resettlement Scheme across the Middle East and Africa. This work now extends to helping recent arrivals from Afghanistan too.
We understand that many will always prefer to speak to someone face-to-face and we are ensuring that this remains an option for those that want it. However, we must also use the latest, state-of-the-art technology to offer the best services possible to our members so that they can access finance regardless of their geographic location to help our region prosper.
If you would like to get in touch with a member of the team, please send us an email or call us on 0117 924 7309.