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processes. Similarly, as the pace of digital adoption – particularly
among the young – reaches higher levels, their ability to invest in new
technology and to compete is in doubt.
“These trends are exacerbated by a skewed membership base – an
over-representation of low-income families and an ageing cohort of
long-standing members who tend to be savers. Without a compelling,
modern offering and a differentiation in the marketplace, these trends
are set to continue. In the context of limited public and philanthropic
support, they are placing pressure on credit unions’ long-run
sustainability.
“But it’s not all doom and gloom. The government is investing £38
million in the Credit Union Expansion Project, again under the auspices
of the DWP. This will see 35 credit unions adopt a common operating
model driven by agency access to payments infrastructure, allowing
a compelling digital offering with the ability to self-serve and access
services online and on mobile devices – as is taken for granted by
today’s consumer.
“Elsewhere, a growing band of credit unions is utilising the proven
mechanism of partnership with employers and payroll deduction to
provide a differentiated and attractive service to those in work (often lowpaid)
– both supporting their financial resilience and diversifying credit
union membership. Government support in accessing the armed forces
via the Ministry of Defence and the staff of the DWP is a key development
– as is the imminent launch of a credit union for the retail sector.
“The next stage of development will be to diversify the services the sector
offers and to innovate in order to build new sources of revenue. Credit
unions around the world already engage in the full range of retail financial
services – competitive mortgage lending, credit cards, car finance and
insurance mediation. British credit unions need to do the same.
“For this to succeed, however, the sector needs regulators to recognise
the importance of a diversified business model to ensure its longterm
stability and growth, and to enhance consumer choice through
competition. Much progress has been made in creating a proportionate
and flexible regulatory regime; we hope that this can be built upon to
allow British credit unions to flourish as they have elsewhere.“
Matt Bland,
Head of Policy and Communications, Association of British Credit
Unions (Abcul)
CSFI 73 LEADENHALL MARKET, LONDON EC3V 1LT Tel: 020 7621 1056 E-mail: info@csfi.org Web: www.csfi.org 33