“Everything must change and nothing will stay the same,” Nick Money, director of the Swoboda Research Conference, told its recent conference in Dublin.
The event gathered over 100 credit union practitioners to discuss what the future might look like for credit unions in Britain and Ireland.
Arguing that credit unions need major transformations to maintain their mission of serving members, Money said that digitalisation is “not just having an app or online banking … We have to talk about how we transform our organisations.“
Throughout the day, participants heard from credit union experts, starting with George Hofheimer from the US, who thinks 2025-2035 could become the credit union decade.
A consultant, Hofheimer has over 27 years of experience in the sector, including 16 at the Filene Research Institute, where he was head of research.
Credit unions have an enormous opportunity to expand their market share by working together, he said. “Collaboration has the potential to be our superpower.”
He mentioned a recent report by McKinsey, which highlights six imperatives for US credit unions: emphasising social impact; engaging through digital channels; investing in digital banking and personalisation; upgrading technology infrastructure; leveraging artificial intelligence; and pursuing mergers and partnerships.
Hofheimer agrees with this, but feels that for the next decade to be one of credit union growth, the sector needs to focus on “the boring stuff” – like prioritising lending, optimising capital, managing expenses aggressively, and providing favourable pricing.
He also advised credit unions to realise economies of scale to generate and obtain as much business as they can get from their members as possible. This means more than one loan account per member, and becoming members’ primary financial institution.
Another session saw Mairead McGuiness, former European commissioner for financial stability, financial services and the Capital Markets Union, share her thoughts on the regulatory environment for credit unions in Ireland and the wider EU.
She warned against some of the risks that come with new technology, arguing that credit unions should focus on empowering and supporting people.
In recent months the EU has shifted its focus from a green agenda to competitiveness – but, warned McGuiness, environmental problems haven’t gone away, and the industry should be careful of a tendency to assume climate change is no longer important.
Another tendency, she warned, is to blame Brussels for regulatory burdens, when in fact a lot of regulation is down to national governments. She encouraged credit unions to check who is responsible for which regulation, noting that some directives includes a recommendation which is not mandatory, but a government chooses to adopt.
“Get your heads together, decide on a number of areas and advocate for those,” she said, warning that “deregulation is not a way out”; instead, policy coordination is required.
Cédric Turini, from the Fédération Nationale des Caisses d’Epargne, a federation of co-operative savings banks in France, discussed ways to attract young members.
“We need to address the ageing profile of our current member base,” he said, referring to co-op banks in France – and warned that this might carry initial costs.
The federation has launched a series of initiatives in recent years to encourage young people to engage with co-op banks, including money management classes for children, student loan schemes that do not require personal guarantees, and partnerships with content creators to raise brand awareness via platforms like TikTok and Instagram.
Meanwhile, young people over 18 are systematically offered the opportunity to purchase shares and become members. One way the federation is trying to encourage them to join is by talking about its social and environmental mission. These initiatives have increased brand awareness among young people, who, said Turini, used to associate co-op banks with an old brand.
But this increased awareness has not yet resulted in substantial increases in membership, and Turini said more awareness campaigns are needed for young people to understand the difference between co-op banks and traditional retail banks, as well as the sustainability credentials of financial institutions.
At the same time, he warned, there is “a big gap between what they [young people] want, what they say and what they do”.
The final session focused on how credit unions can use AI to improve efficiency. Led by Mark Kelly, president of AI Ireland, the session showcased some of the current uses of AI within the business sector, from customer service support to HR.
Kelly warned about the unauthorised or untracked use of AI within an organisation; this “shadow AI” can lead to data security breaches and non-compliance with regulations.
“If you haven’t trained your people you shouldn’t be using these tools,” he said, advising credit unions to use paid products and provide AI training to staff. And credit union practitioners should take time using AI to understand how to make best use of it.
“If you give it direction you get the best results but you have to take time,” he said.
He gave examples of everyday uses of AI – such as transcribing conversations or improving slides for presentations. AI can also be used to detect fraud or provide more personalised experiences, he said.
He added that while the human touch remains “extremely important”, younger customers expect on-demand services.
And while credit unions are the most trusted brand in Ireland, they need to become more efficient, he argued. “We have to go back to zero – re-learn and change how we’re going to do things”.
Closing the conference, Swoboda’s director of research, Paul Jones, said he expected a lot of crossover of ideas between credit union movements in Ireland and Britain. “Even through the contexts are different in both jurisdictions we’re thinking about the future,” he added.
This article was amended on 29 May to rectify a quote by Nick Money
