Hello, my name's Miss Ikomi and I'm a teacher from London.

I'm going to be taking you through today's lesson, so we're going to get started.

Today's lesson is called, How is the financial system changing in a digital era? It's part of the wider unit, How do we look after an ageing population? By the end of today's lesson, you will be able to explain how banking has changed over time and what effect these changes are having on society.

The keywords we're going to hear in today's lesson are: online banking: this is a secure place to store, manage and access money, allowing deposits, withdrawals, transfers, and payments through the internet.

The next is online fraud: this is when someone acts, lies or breaks trust to gain money or cause a loss, again, through the internet.

Keep an eye out for these keywords in today's lesson.

We're going to start by thinking about how has banking changed over time? Over the last 200 years, banking has changed a lot.

In the past, people would store wealth in things like gold, jewels or coins, rather than saving their money in banks.

The Bank of England, one of the world's first central banks, was created in 1694 to help manage the country's money.

The Bank of England started to issue its first bank notes.

They promised to pay the person, the bearer, a set amount, and they still contain this phrase today.

For example, the Bank of England is still issuing bank notes.

This one has the portrait of King Charles III on it.

This was first issued on the 5th of June, 2024.

We have other famous people and other monarchs on different bank notes In the 1800s, bank managers were highly respected, and opening an account often required a personal interview and references, meaning that they checked that you were who you said you were and that you had a good reputation.

However, this looks different today.

We now have online applications that are much simpler.

Banking previously was formal and mostly carried out face-to-face.

People would dress up in smart clothes just to visit the bank and to withdraw the money.

In the late 19th and early 20th century, major British banks like Barclays and Lloyd's expanded significantly.

This happened by acquiring smaller regional banks.

This helped them to become national institutions for the first time.

Lloyds and Barclays, alongside HSBC and RBS, became known as the Big Four.

They began offering everyday accounts, savings, products, and loans to customers.

During the 20th century, banking became more organised and available to everyone, so we didn't have the formality that was previously associated with this industry.

Let's put this into practise.

Some of the sentences below are true and some of the others are false.

I'd like you to arrange them into the correct column in the table.

Pause your video now and then we will check our answers.

Let's check our answers.

The true column should have had number 2: In the past, you needed references to open a bank account.

It should also have had number 4: By the 20th century, the Big Four became national institutions.

Number 1: the Bank of England was founded in 1946 is false.

And last, banking has always been mostly online is also false.

Well done if you got those correct.

Technology has sped up banking, particularly rapidly growing in the 1960s.

At this point, the first automated teller machine was installed in 1967.

Today, we still have these and often they are called cash machines or ATMs. ATMs allowed people to take out money without having to visit a teller, or a cashier, in person.

Instead, they can remove money via their debit card from the machine, making it more efficient, but again, reducing the face-to-face element that we had seen previously.

At the same time as this was going on, debit card payments began to replace checks for making those payments.

However, paying with a card was a slower process than it was today.

There was lots of paperwork involved, so it wasn't as easy as the processes we have now.

This was a step towards the online banking services that we now use.

For instance, contactless payment on a smartphone or electric device came about as a result of these different changes.

Let's do another check.

I'd like you to look at the image on the slide and answer the following questions: What is this machine called? What decade were they first installed in? And what did it change in banking? Pause your video and have a go at this now.

Let's check our answers.

This machine is called an ATM, an automated teller machine.

They were first installed in the 1960s and it meant that people didn't have to use a teller and could get their money using their debit cards from a machine.

We have seen even more changes to banking, more recently with a move towards digital services.

For example, we now have challenger banks.

These are banks that operate only online.

That means that they have no physical branches and therefore they don't have tellers in quite the same way as we saw previously.

Banks today are also taking advantage of different technologies, such as artificial intelligence, AI, contactless payments, and online banking mobile apps.

This means that customers have gained much more freedom in terms of how they choose to bank.

The UK Finance reported that in 2023, 38% of all payments made in the UK were contactless.

33% of UK adults were using mobile contactless payments at least once a month, and 12% of purchases were made by cash, therefore, much lower than the contactless or debit card ratio.

Let's do another check.

Banks that only operate online and have no physical branches are called what? Is it A: discovery banks, B: challenger banks, C: voyager banks, or D: active banks? Pause your video and choose your answer.

The correct answer is B: challenger banks.

Banking today is now faster and more global than it was before.

International payments are made securely through systems like SWIFT.

This was set up in 1973 and connects different banks across the world so you can send and receive money easily, whereas it wasn't so easy before.

However, this also means that banks have to be really careful when it comes to security.

Online fraud risks are higher than ever because we have this global connection.

In 2025, there are new systems being introduced all the time that warn users immediately if fraud is suspected.

This helps protect customers from online fraud.

That's when someone uses lies or trickery on the internet in order to steal money or benefit themselves.

Let's do another check.

I'd like you to read the sentences below and choose the correct word to complete the sentence about banking.

Pause your video and have a go at this now.

Let's check our answers.

Banking is now more global.

SWIFT payments connects banks around the world.

A third of all payments in 2023 were mobile contactless payments.

Let's do a longer task now to put this into practise.

I would like you to create a short timeline with five important events on the history of banking and write a sentence explaining what happened in that event.

Alex is giving us a hint.

"We could start with the Bank of England in 1694 and finish with mobile banking apps in 2025." Pause your video and have a go at this now.

I asked you to create a timeline about different changes in banking.

It might have looked like this: You might have said, In 1694, the Bank of England is founded to help manage the country's money.

In the 1800s, banking is a formal and personal process.

In 1967, the first ATM is installed.

This allows people to get money from a cash machine without a teller.

In 1973, SWIFT payments are introduced, which allowed for global banking and sending and receiving of funds.

Then in 2025, mobile banking apps and challenger banks are becoming more popular.

Next, we're going to think about what are all of these changes and effects of banking having on society? Online banking has made managing money easier for lots of lots of people.

For example, a person living in rural Wales can now open a bank account, transfer money and pay for shopping without needing to travel to a branch, which might be quite far from where they live.

Additionally, international payments can now be done with contactless payment rather than visiting a branch and having to complete forms. This is much more efficient than how it looked previously.

Let's do a check.

Which is a change caused by online banking? Is it A: more people using bank branches, B: more people making cash payments, C: more people managing their money from home, or D: more people using ATMs? Pause your video and choose your answer.

The correct answer is C.

We saw that in that example of someone living in rural Wales.

However, despite the efficiencies and the benefits, the move to online banking can cause difficulties for some people, especially older people who may not be confident in using the technology that is fairly new.

This has become more of a concern and challenge when it comes to an ageing population.

An ageing population is the idea that the average age in the UK is getting bigger.

This is because people are living for longer and we also have fewer children being born, which would reduce that average.

Some older people are experts at using technology and others are reaching out for information and clubs to teach them more, particularly with the rise of online banking.

So we need to make sure we're being inclusive of these differences.

The UK has an ageing population.

The number of older adults steadily is increasing over time.

In 2022, people aged 65 and over made up a significant portion of the population.

This trend is expected to continue in the coming decades.

In 1972, 7.

5 million people were aged 65 and up.

This accounted for 13% of the population.

In 2022, 12.

7 million people were aged 65 and up.

This accounts for 19% of the population.

It is projected in 2072 that 22.

1 million people will be aged 65 and over, so that's around 27%, almost a third of the population.

This shows why it is so important for us to understand the age structure of the UK.

This clear upward shift shows that we need to address these changes within the Government and within society, thinking about what are going to be the changing and different needs of these different populations.

The Oak National Academy pupils are discussing the issues that could be caused by online banking for older people.

Jun says, "My grandma enjoyed going to the bank to meet people.

She missed her trips to the branch when it was closed." Izzy says, "I think it's unfair to make people who didn't even grow up with computers suddenly have to understand online banking." Andeep says, "My parents don't even use smartphones, so the change will be really difficult." So we can see some of the challenges that come up alongside those efficiencies we saw earlier on.

The trend towards cashless payments is affecting small businesses and local communities.

For example, market stall owners or local shops that don't accept card payments could lose customers.

That's because most shoppers now expect to pay using contactless.

Businesses have to adapt very quickly to keep up with customer expectations, and that might mean that they need to make a lot of changes.

Another issue is the idea of online fraud.

This has increased because of online banking.

It's much easier for hackers to get into online bank accounts.

UK Finance's Annual Fraud Report in 2024 found that online fraud cost people 1.

17 billion pounds in 2023.

The UK Government has to put in swift guidance that requires banks to refund customers quicker if they're victims of online fraud.

This is under the Online Fraud Charter, which was introduced in November, 2023.

Let's put this into practise.

I'd like you to sort these effects into positive and negative aspects of online banking.

Pause your video and have a go at this now.

Let's check our answers.

In terms of the positive effects, you should have said that it is easier to manage money from home and that we have faster international payments.

In terms of negatives, you should have said, some local businesses might struggle without card machines.

Older people might find it hard to access, and there is an increased risk of online fraud.

Another effect is the growing importance of financial education.

Schools have been expected to teach financial education since 2014.

They teach pupils how to manage money safely online, how to spot scams, and also how to understand how online banking works.

Therefore, we have all of these messages coming from an informed source.

Today's young people are therefore more likely to be financially literate than previous generations who weren't taught these things at school.

Finally, these changes are causing a digital divide in society.

Some people who don't have reliable internet access or who struggle with digital skills are being left out of the modern financial system.

Some local government services now offer free classes to teach people how to use online banking safely.

They also teach ways to avoid online fraud to help people access new technology safely.

This is aiming at countering that digital divide.

I'd like you to fill in the words in the sentences below with what is missing.

Pause your video and have a go at this now.

Let's check our answers.

Schools are now teaching financial education to give pupils the skills they need.

Many of these changes are creating a digital divide in society.

Some local government services help people learn online banking.

Let's put this into practise with a longer task.

I'd like you to write a short speech to explain to your local community why online banking is changing society.

I'd like you to include: one way that online banking has made life easier, one problem that has been caused by online banking, and one method that people can use to learn about online banking.

Pause your video and have a go at this now.

I asked you to write a speech talking about the challenges and benefits of online banking.

You might have included some of the following in your answer: "Online banking has completely changed society by making it much easier to manage your money.

For example, people living in rural areas who used to travel long distances to visit a branch can now transfer money and pay bills from home using mobile apps.

However, one major concern is that there are some older people who are struggling to use digital technology and risk being excluded.

To help, local government services now offer free classes to teach people how to bank online safely and confidently.

This will become increasingly important in an ageing population like in the UK." Alternatively, your speech might have gone from a different angle.

You might have said: "Online banking has made life much more convenient because we can now instantly check our balances, transfer money, and even pay for shopping by contactless payment on our smartphones.

However, it also has increased risks of online fraud where criminals trick people into handing over their bank details.

In 2023 alone, online fraud costs UK citizens over a billion pounds.

To stay safe online, people can attend free online fraud awareness classes run by local government, which teach practical skills for secure online banking.

And at school, the Government have included financial education in the curriculum.

This has been there since 2014.

Today we have been learning about How is the financial system changing in a digital era? We have learned that banking in the UK has changed from face-to-face services in physical branches to fast, online banking through apps and websites.

New technologies like ATMs, debit cards and mobile payments have made managing money quicker and more convenient over time.

However, these changes have also caused problems such as an increase in online fraud and challenges for an ageing population who may struggle with online banking.

The move towards online banking has widened access for many people, but also risks excluding those without strong digital skills or internet access.

To protect customers and promote financial safety, government services are offering support through training and financial education.

That's the end of today's lesson.

Thank you for joining me.