A research project is under way to develop a new vision for British credit unions, as movement growth flattens out and sector leaders look for ways to adapt to a fast-changing world,<\/p>\n
The work is being led by Swoboda Research Centre and New Economics Foundation (NEF), which kicked off the process at a meeting in June (pictured). The goal is \u201ca collaborative endeavour to build a shared vision for the sector for 2035, and a roadmap for how to achieve it\u201d.\u00a0<\/p>\n
Nick Money from Swoboda tells Co-op News: \u201cThe credit union movement has developed amazingly over last 10 years but growth is starting to plateau, if you take out the expansion of the big players.\u201d<\/p>\n
Meanwhile, there is \u201cuncertainty on the horizon over AI and digitisation of everyday life. Talking to our credit union customers, it was felt this was a moment to decide how they could be sustainable but work for society.\u201d<\/p>\n
Swoboda and NEF are being supported in the work by sector bodies like the Association of British Credit Unions (Abcul) and the Co-op Party, and is engaging with suppliers, financial inclusion organisations and policymakers such as the Treasury and regulators.\u00a0<\/p>\n
Last month representatives from all these stakeholders gathered for a meeting at the Friends House in London, where Ed Mayo, CEO of Pilotlight and former secretary general of Co-operatives UK, said: \u201cThe idea that a credit union is the best kept secret has gone on too long \u2026 They are part of a wider scene shaping financial inclusion more widely.\u201d<\/p>\n
The sector is challenging government round financial inclusion, and challenging banks round accountability, he added. \u201cThey combine the passion of opposition \u2026 with proposition around it, showing how things can be done in a different way.\u201d<\/p>\n
And the co-op model brings the sector advantages over social enterprises, said Mayo. \u201cYou are closer to the people that you serve \u2013 it\u2019s members\u2019 money. You have the benefit of a balance sheet \u2013there is a higher failure rate in social enterprise. Your members participate and you have authenticity \u2013 with co-operative purpose and values embedded into legal and regulatory identity.\u201d<\/p>\n
But the need to adapt to a new era is clear, he warned. \u201cAt the moment it is a very tough picture for the people credit unions are there to serve. I can\u2019t remember a tougher time for civil society.\u201d<\/p>\n
Other challenges for the movement include\u00a0 the need to build capacity for financial inclusion; the succession issue and generational leadership change; and growing pressure from regulators or stronger governance.\u00a0<\/p>\n
Related: Can the credit union movement seize the day?<\/a><\/strong><\/p>\n And there is \u201curgent need for technological capability at senior management and board levels to meet digital consumer preferences and compete with the scale economies of banks and other providers.\u201d<\/p>\n From Swoboda, Paul Jones told the meeting: \u201cThe last decade has seen immense change in terms of governance, management, digitisation and modernisation and growth and each are starting to plateau.\u00a0<\/p>\n \u201cThere is still a growing need for accessible, affordable and ethical financial services in the context of recent economic, demographic, environmental and technological changes.\u201d<\/p>\n The Swoboda\/NEF project will look at a movement-wide revaluation of purpose, values, mission and operating\/delivery models, with a \u201ccollective, collaborative inquiry into where we are at movement level.\u201d<\/p>\n Responses to an initial survey for project, with 200 respondents, show a clear desire for growth and expansion, said Jones: 97% of CEOs and senior managers said agreed with this, as did 93% of all respondents.<\/p>\n But only 38% were confident about this growth for their own credit union, and only 19% felt confident about the\u00a0 whole movement.<\/p>\n As an example of how to turn things around, the event heard from Ciara Davies, CEO of Metro Moneywise, part of the Greater Manchester consortium, Sound Pound. This group of credit unions has driven growth by connecting with the opportunities of devolution and the creation of the Greater Manchester Combined Authority, and connecting with the authority\u2019s strategic objectives. Initiatives include working with mayor Andy Burnham on finance for annual travel tickets, and partnering on green home finance as part of the regional retrofit strategy.<\/a><\/p>\n Working with the authority and other organisations has increased Sound Pound\u2019s profile. The consortium allows the credit unions to pool resources, share risk, and act as a\u00a0 \u201cdisruptor\u201d which has lent \u00a3500,000 to social enterprises. \u201cThe credit unions trust each, talk and collaborate a lot,\u201d said Davies. \u201cThere are a lot of gaps in market where the financial services sector has not stepped up.\u201d<\/p>\n The meeting also heard from stakeholders including Helen Undy from the Money and Mental Health Policy Institute, who said credit unions have a role to play in improving financial inclusion for people with mental health problems. This can mean designing services \u201cfor people who struggle to make a phone call\u201d, she said, or creating services a carer can use on a member\u2019s behalf. Debt collection can be \u201cscarring\u201d, she warned, calling for changes to avoid a loss of trust when things go wrong.<\/p>\n Erel Onojobi from the Runnymede Trust agreed, saying: \u201cWe need to work out why we\u2019re trying to force people to fit into a system that wasn\u2019t made for them.\u201d Looking at issues around race, and the legacy of colonialism with \u201cthe sort of jobs people were allowed to do\u201d, she argued for an \u201casset-based approach whereby communities can be agents of change, through community ownership and stronger civil society\u201d.<\/p>\n Abcul CEO Matt Bland warned: \u2018There is a real urgency in terms of the need for a bigger role for credit unions\u201d\u00a0 \u2013 but, with outcome of the next general election far from certain, the sector should be aware that the current level of policy support might not last.<\/p>\n