From financial insecurity to lockdowns preventing access to high street bank branches, the pandemic brought numerous changes to the way both people and businesses handle their money. The impact accelerated the need for more advanced technological solutions, including increased accessible banking options at a time when leaving the house was not encouraged.

Once seen as an afterthought, a way of promoting products or enabling the more basic financial functions, online banking is now essential for all banks and financial management institutions. As individuals become more accustomed to using digital platforms due to the pandemic, simply offering an app to view your bank balance is no longer enough.

The good news for consumers is that credit unions, as well as high street banks, have been leading the way when it comes to making sustainable finance more widespread and easily accessible to the masses. For credit unions, the adoption of fintech solutions has been a game changer bringing ethical products to new audiences.

Digital adoption is picking up speed

It’s thought that the pandemic sped up UK banks’ digital adoption by five years – and that is no surprise. Quickly setting up direct debits or one-off payments, opening new accounts, and even paying in cheques have become the norm with online-only and forward-thinking banking apps. Those that are failing to keep up will be losing the opportunity to secure new customers as a result. What’s more, technology also could help to provide more personalised services for customers based on the information they provide.

After all, if customers can no longer receive these services on their high street – 4,685 branches have closed so far according to Which?, and another 200 are set to be closed by the end of 2022 – then an easy and accessible alternative is essential to allow people to manage their money.

Are branch closures a sign of sickness or health for banking?

The statistics around bank closures might sound shocking, but prior to these branches closing, visits to brick-and-mortar banks had dropped by 33%, in part thanks to 73% of the UK’s population now having moved to online banking. For financial institutions, this also means there are fewer overheads to pay, as online services provide the same solutions; in some cases, this can mean lower interest rates or cheaper deals for customers.

For local financial services like credit unions, it has been easy to get stuck in the thought process that useful community services can only be effective when offered face-to-face. However, this isn’t the truth, particularly in a world where so many people are used to managing their finances online, expecting to be able to view statements, make transfers, and engage with their provider at the touch of a button.

Great Western Credit Union (GWCU) has found that accessing accounts online has helped increase the credit union’s user base. Putting control in the hands of the customer has led to 53% of GWCU’s loan members choosing this credit union due to the ease of applying for a loan online rather than in-person.

In addition, conducting user research and formalising its agile approach based on a comprehensive backlog means that the credit union is constantly seeking to build on its success to keep its offering fresh and relevant for its members.

New features such as face-to-face video chat, engagement via social media, and greater certainty about loan decisions sooner are all features that members have requested, and that the credit union is now in a position to prioritise for future development.

Digital banking is now a necessity, not a luxury

While it is true that in-person services offer a personal touch that helps us to connect with our clients and community, is it not more valuable to give them financial independence through a highly functioning and accessible banking app?

This is not a luxury benefit. It’s what is now seen as a necessity – particularly by younger generations – and it seriously impacts customers’ decision-making when moving or opening new banking accounts. There was a time when fintech and online banking were perceived as a threat to credit unions who were hesitant to invest and adopt innovative digital offerings.

However, since then 85% of people now actively prefer to use a mobile app to do their banking.  In the US alone, this figure grew from 196.8 million to 203 million between 2021 and 2022 – which is  a huge proportion of potential customers that organisations lacking in the fintech department are missing out on.

It is clear that to continue making an impact and performing as legitimate competitors to the big banks, credit unions cannot afford to fall behind on their fintech offerings, despite the ever-increasing pace at which these technologies are advancing. If banks and credit unions wish to keep up with what customers want from them (and what others are already delivering), then there is no time to feel overwhelmed by these changes – which are reflected across all of modern, tech-dependent life. Instead, we need to embrace them.