Why the move to digital is an inclusive one

By Ravi Kumar, Senior Product Manager, Gatehouse Bank

The way we live, and work, has changed dramatically over the last decade, due to digitalisation permeating our daily lives. From ordering food and connecting with loved ones, to booking appointments and accessing financial services, digital products have become increasingly accessible, transforming everyday activities.

The growth in technology is evident by the number of Britons using online banking, which has skyrocketed from 32% in 2007 to well over 90% in 2022.[1]

The increased convenience presented by digital banking services in today’s fast-paced world, including round-the-clock access and greater control, is evident. However, digital banking also presents another important advantage: the potential to drive financial inclusion. This is an issue that has long dominated the financial services sector, with one in four adults in the UK experiencing financial exclusion at least once in their lives.[2]

For example, it may be much more difficult for those with an impeding mental or physical condition to travel to a bank branch or interact with others face-to-face. This will only be exacerbated by the rate at which banks and building societies are closing their physical doors, with over 5,000 branches closing down since January 2015.[3]

Digital tools enable customers to bank wherever, whenever, and however they like, which is an important step towards helping more people access their money and receive financial support, no matter their circumstances.

Not only does this make life easier, but increased accessibility also allows more people to stay on top of their finances, which are only a click away. With digital services such as automated savings tools, overdraft notification alerts, and instant access to customer service, the likelihood of bank cards being declined due to a lack of funds is reduced. This is especially important in the current cost-of-living crisis.

Boosting financial resilience

The wake of the pandemic and ongoing economic crisis has resulted in many people dealing with financial stress and uncertainty, with nearly nine million people in the UK in serious debt, but only a third receiving the help they need.[4] One of the ways in which the banking industry can help to remedy this problem is by allowing customers to discreetly access information and advice from the comfort of their own homes.

It’s also crucial that we continue to build financial resilience and literacy across the population, as a study by the Money & Pensions Service found that as many as 45% of adults don’t feel confident in managing their money.[5] The first step in overcoming this is to have an online presence across all financial institutions, as people are far more likely to engage with their finances if they’re able to access the right tools and information online in an easily digestible way.

Fortunately, the UK is leading the way when it comes to embracing digital services, with over $9 billion invested in fintech in the first half of 2022 alone.[6] Earlier this year, Gatehouse Bank launched a mobile savings app for iOS and Android to support customers in managing their personal savings accounts.

This has been an important step towards supporting and empowering savers by offering round-the-clock access to their accounts by enabling them to view their account balance, recent transactions, and personal information. Becoming more familiar with navigating personal finances online will not only help to increase customers’ knowledge and confidence but will also pave the way for people to become more engaged with other financial services, such as home purchase plans.

Despite this, some may feel that an emphasis on digitalisation may exclude certain customers due to the lack of human interaction. However, the reality is often the contrary, as many banks including Gatehouse have a dedicated customer service team that enables less tech-savvy customers to receive step-by-step instructions and support.

While there have been questions in the past regarding data security in an increasingly online world, digital banking has proven to be far more secure than traditional banking. The introduction of sophisticated verification codes and facial recognition technologies has resulted in a higher level of security than in the past where it was common for people to carry large sums of cash, or even their pin number, in their wallets.

A digital future

The past two decades have seen the banking landscape evolve and develop at a rapid pace, which shows no signs of slowing down. Looking ahead, innovation and digitalisation will continue to expand people’s access to finance.

In 2010, 56% of all payments were made in cash but by 2020 this number had fallen drastically to just 17%[7] – a clear sign of where the world is headed.

If the past few years have taught us anything, it is that we must build the infrastructure and systems to allow people to confidently access financial products and services remotely and digital banking will be at the heart of this.

[1] Online banking users Great Britain 2022 | Statista

[2] Statistics – The Inclusion Foundation

[3] Bank branch closures: is your local bank closing? – Which?

[4] Key statistics on UK financial wellbeing, numeracy and – FinCap

[5] 24 million UK adults don’t feel confident managing their money. Talk Money Week is here to help. | The Money and Pensions Service (maps.org.uk)

[6] UK FinTech investment tops $9bn in first half of 2022 – FStech Financial Sector Technology

[7] SUMMARY-UK-Payment-Markets-2021-FINAL.pdf (ukfinance.org.uk)