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Matt Bland reviews 2018 in Credit Union sector

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11 Jan 19

In an interview for Co-operative News in their review of 2018 in the cooperative sector, ABCUL’S Head of Policy & Communications, Matt Bland reflected on what has been a significant year for the credit union sector and ABCUL. 

How was 2018 for your organisation and your sector?

It’s fair to say that 2018 has been a challenging year for the credit union sector. Though credit unions continue to grow and strengthen then overall, very sadly there has been a higher than usual number of failed credit unions. This demonstrates the challenging environment credit unions are operating in as regulatory burdens increase, the expectations of consumers expand and technological innovation becomes ever more imperative. For ABCUL it has been a year of change as we welcomed a new Chief Executive (Robert Kelly) and a new President of the association’s board (Karen Bennett). With new leadership there are new ideas about how to take the sector forward and there are exciting opportunities on the horizon.

How did British credit unions make a difference in 2018?

Credit unions continue to be the primary vehicle for the delivery of inclusive financial services in the country. We have conducted analysis this year on those credit unions that use our subsidiary’s ALD credit decision tool which demonstrates the depth of breadth of credit unions’ lending to those at the margins of the financial system. Credit unions are lending heavily, for instance into all of the 10 most deprived communities according to the indices of multiple deprivation and consider loans that few other lenders would in terms of amount of applicants’ credit scored while charging considerably less than any other lender to these groups we also see patters of improvement among the credit profiles of credit union borrowers. 2018 was an exciting year given the profile and prominence of issues of financial exclusion and over- indebtedness from government, the regulatory authorities and people like Michael Sheen and his new End High Cost Credit Alliance. There is a groundswell of support for action to promote the likes of credit unions and we are keen to see the warm words and rhetoric of 2018 turn into concrete action in 2019.

What are the key challenges for credit unions in 2019 and how they can prepare for these?

Credit unions’ big challenge is that of relevance. We know that credit unions’ values resonate with millennial consumers, but today too many credit unions fall short of that generation’s expectations in terms of digital accessibility and convenience. Transforming the way that credit unions can be accessed by their members will be critical to securing their future. But there are lots of exciting developments in the fintech space which present opportunities for credit unions to tackle this head on.

For ABCUL we have some ambitions in the policy space to prove an environment in which credit unions can flourish and we are hopeful 2019 will be a year of progress in that respect. We’d like to see government legislate to enable credit union innovation in lending. The Bank of England reviews its upper capital requirements to unlock latent growth in the sector and the proposed new Financial Inclusion Organisation to begin investing in ambitious growing credit unions.

Credit unions have much to be optimistic about despite the many challenges they face. ABCUL will be launching a major town hall consultation at our annual conference in March to set the vision for the next five year of our movement and to provide clarity of purpose in terms of the sector’s ambition, our shared strategy for achieving it and the ways in which those with a stake in our future can support us to get there.

Read the full co-op news review of 2018 here.

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