Last year the Association of British Credit Unions (Abcul) launched a sector-wide consultation to gather views from members and non-members about a future strategy for credit unions.
“We are not looking to repeat any past mistakes,” chief executive Robert Kelly told the trade body’s annual conference in Manchester, where he announced a five-year strategy based on the consultation. The document, Vision 2025, says credit unions need to evolve, become more digitally efficient, and offer a wider range of services. It also sets out Abcul’s role in driving the movement forward.
The consultation focused on four key themes: sustainability, relevance, collaboration and purpose. Around 94% of respondents said they want Abcul to build bridges across trade body movement. Those taking part also also want Abcul to facilitate and coordinate strategic mergers (95%), and develop new services. And 86% want Abcul to develop new paid-for services, with 60% calling on it set standards and benchmarks.
In terms of sustainability, 92% said growth was a priority for their credit union while 70% identified growth as their top goal. On relevance, respondents agreed that partnership with fintech providers was a key route to going digital. Around a third of respondents were content to offer the traditional savings and unsecured personal loans only model.
When asked questions about collaboration, 85% of respondents actively support the idea that credit unions in Britain should work together to develop credit union service organisations. A key finding around purpose was that 88% of respondents support the idea of Abcul taking the lead on developing data on who credit unions are serving and the social value they create.
After canvassing views through a series of events, individual meetings and an online survey, Abcul explored the key findings to establish evidence for policy changes and set out a roadmap for the development of products and services to support the sector’s strategic aims.
Strategy objectives include credit unions becoming digital-front providers of savings, lending and payment products, and closer co-operation between credit unions informally as well as through credit union service organisations. The vision also sees credit union build a traditional and digital marketing skills base within the sector to drive awareness.
Abcul’s role in this process, as envisioned by respondents, will include consulting further on coordinating and supporting strategic mergers, developing a paid compliance service for credit unions to share the cost of regulatory burdens, and building on existing core services. Furthermore, Abcul will focus on attracting additional capital investment into the sector, support the Credit Union Foundation as its delivers a bespoke leadership and management school for credit unions, develop a marketing service and facilitate the sector’s navigation of the FinTech environment. In addition, Abcul will be working on developing a “clear and compelling narrative around the role of credit unions in extending access to affordable credit” and a shared data service providing clear intelligence for credit unions to analyse business activity.
To deepen collaboration, Abcul and other organisations will facilitate the development of credit union-owned and led CUSOs and explore the development of a system of standards and benchmarks for credit unions.
Mr Kelly added that it was important to remember that the strategy was not to be imposed on all credit unions and that some were not as far as others. “For some legislative reform and new products and services are not a priority,” he explained. His advice for those credit unions is to ensure that in five years’ time they are in a sustainable situation.
“Can we afford not to go down this route? No,” he said.
Abcul will be publishing a document with further details about the strategy and how it plans to stay on track later in May.