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Digital transformation for Welsh Community Bank

Smart Money Cymru, Caerphilly. Picture by Nick Treharne

Digital innovation has helped a Welsh Community Bank transform the service it gives its Members, a Technology forum in Abertillery has been told.

The Digital Technology Learning Support Network, which aims to promote digital education in schools, heard that Smart Money Cymru Community Bank had seized the opportunity of down-time during Lockdown to upgrade and modernise. Smart Money Cymru, which is also a Credit Union, moved from being, in the words of its CEO Mark White, “paper-led” to offering a digitised experience to its members.

Mr White described the digital journey to the forum in Abertillery. “The starting point for Smart Money was grasping an opportunity funded by Welsh Government for a small group of Welsh credit unions to adopt a new loan processing platform so that members could apply for loans online.

“The technology was provided through our existing operating software providers and that gave us a great springboard from which to start our journey.

“Overnight, our average loan processing turnaround went down from four days to under 24 hours. Our aim and next step will be implementation of fully-automated loan application decisioning and processing, available to customers 24/7”.

 Positive Response

Investment in new digital platforms led to an immediate, positive response from the communities in Caerphilly, Islwyn and Blaenau Gwent served by Smart Money Cymru, as well as clients in other parts of Wales. “In the last year we increased membership by 44% and nearly doubled our loans to Members; also deposits are up by 50%, and our revenue income rose by 45%,” added Mr White.

He was delighted, he said, that the new digital platform was playing a large part in helping  the Credit Union fulfil its mission of tackling financial exclusion. Around 90% of loan applications are now made online, and the plan now is to extend this and other services, and move to a ‘24/7’ basis.

Digitising had not been an option but a necessity. “Had we continued as a paper-led organisation and not embraced technology we would have become irrelevant to our market, and eventually I am convinced we would have collapsed.”

The Community Bank’s aim, he said was to strive to promote a culture of savings within communities, and to keep that money within those localities by lending to members and helping to tackle financial exclusion.

Household Budgets

Indeed, the role of Credit Unions and Community Banks in the UK is growing, and the sector is likely to become more important as traditional banking retreats from the High Street and inflation puts pressure on household budgets. Just under 2 million people in the UK are Credit Union members and CUs hold around £3.5 billion in deposits, while lending £1.8 billion.

Mr White, who has 40 years’ experience in banking, feels the industry needs to change to tackle problems of social exclusion and to empower people to have more control over their finances and their lives. “Credit Unions in the UK are a significant part of the banking sector and so it is vital that they keep up with technology and are looking to continuously improve.

“Smart Money has come a long way in our journey over the last two years and we have achieved a great deal in embracing what digital technology offer. This has only been the start of the journey. It has been a learning curve for us and, we hope, revelatory for our member-customers. What comes next though becomes even more exciting”.