Banking Has Changed - A Lot!

While I was growing up in the 1970/80’s, I remember my mom having to run to town (we lived on a farm) very quickly in order to pay a bill at the bank before it closed at 4:00. She did that run maybe 2 or 3 times per month.  She also withdrew some cash for small purchases, but most of our larger purchases, like groceries, were paid for by cheque.  That was the norm for a few decades for families all across Canada.

In the early 1980’s bank/debit cards and ATMs were introduced, allowing Canadians to do withdrawals from their chequing account.  This added a major convenience as consumers no longer had to worry about getting to the bank when it was open for cash withdrawals.  With the addition of deposit services through ATMs, Canadian banking habits started to change, and those habits were no longer centered on banking hours.

In 1994, debit cards started to be used on a network called Interac, allowing consumers to pay at participating retailers directly out of their chequing account.  This meant consumers no longer needed to get cash, and retailers no longer needed to worry about NSF cheques or cheque fraud.  As a result, many retailers stopped accepting cheques all together.  By 2000, over 70% of Canadian adults were using debit cards regularly, and by 2008 debit card transactions made up as much as cheques, cash and credit cards combined, with cheques dropping to below 2% of transactions.  Today Canada is second only to Sweden for the number of debit card transactions per person.

Online Banking was introduced in the late 1990s.  Concerns over internet safety prevented its popularity from growing as quickly as the debit card, but by 2008 two thirds of Canadian adults were using online banking.  At Rocky Credit Union, over 60% of the bills paid through us are now paid using our online banking website.  The convenience of being able to pay bills or transfer funds from your home or office has led to rising usage on farms and other businesses who don’t want to run into town during banking hours.  With additional online services, like exchange calculators, being able to name accounts, and seeing scanned cheque images, online banking is quickly becoming the primary way Canadians deal with their financial institution.

Now new waves of conveniences are rolling out.  Text banking allows people to securely see their account balances and transactions, with the added ability to pay bills through cell phones being developed at all banks.  Soon it won’t matter where you are, you will be able to do your banking whenever and wherever you want.

Banking is definitely not the same as it was 20 years ago.  The speed of transactions has become instantaneous, versus waiting several days for cheques to go through.  With so many employers and the government automatically depositing pay cheques or pension cheques into accounts, you no longer have to worry about slow mail or running into the bank with a paper cheque to deposit. The expectation is that transactions will happen immediately, no matter who you are.

Some people wish things would go back to the way they were.  Slower was better, taking your time never hurt.  While I personally like periods of calm, the convenience and speed that these technologies provide would make it very difficult to go back to simply a cash and cheque economy.  I know what is in, or has gone through, my chequing account everyday because of online banking, and I can check on that information from home or work or while on vacation at my Mom’s place.  There is a certain level of security that kind of access to information provides, and I wouldn’t trade it for anything.

It will be very interesting to see what banking technology and habits look like in another 10 years.  Something we probably can’t even think of today will shake it all up and change everything again.  I hope I’m ready.  Jerry