How credit unions can improve financial inclusion across the industry
Access to financial services plays a critical role in our day to day lives. It enables us to plan our futures, from saving to investing in property and planning for retirement to insuring our most valuable possessions.
Financial exclusion is a global issue and no more worrying than here in the UK, where 7.1 million adults are classed as financially excluded1, meaning they could potentially struggle to access affordable and fair financial services.
While financial exclusion has been on the decline for a number of years, the recent cost of living crisis has seen 3 out of 4 adults in a worse off financial situation2. From soaring mortgage rates to sky high energy bills, it will take many people in the UK a long time to recover from this tough financial climate.
Traditionally, credit unions have played a critical role in supporting people who are financially excluded and as this trend soars amongst adults in Britain, there’s a significant opportunity for the credit union sector to step up and support those members who are most in need of financial equality.
To help attract these prospective members to the sector, there are a number of tactics to implement.
Over half (55%) of consumers don’t trust that their banks work with consumers’ best interests3 in mind, while 40% don’t trust their banks with their data4.
Since the financial crisis and more recent issues that have plagued banks in the UK, consumer trust is at an all time low. While traditional banks fail to impress and online only banks are still in their infancy, the credit union sector has a significant opportunity to engage those customers who are disillusioned with their current financial providers or under served with no access to financial services.
Credit unions have a well established reputation across the UK, and members tend to remain in the long term. However, for a number of years, the industry has been rife with myths and misconceptions which can lead some potential customers to believe that credit unions can’t offer what they need.
Common myths include:
- Opening an account can be a long difficult process
- Money isn’t as safe as it is in a bank
- They don’t have competitive rates like banks
- They are outdated
- Most suitable for people borrowing a small amount over short periods
- Only for low income customers with poor credit history
By dispelling these myths and changing the perceptions of the sector, credit unions can welcome more members to support growth.
Improving your digital offering
By collaborating with strategic partners, credit unions can embrace innovative software to empower more members through streamlined processes and provide services for those who are usually financially excluded.
Our latest collaboration with NestEgg – a software provider helping credit unions manage and monitor credit history and behaviours of their members, helping to make risk-based decisions on lending and improve their financial health – will support our credit card programme.
Discover exactly how this partnership benefits credit unions across the UK, from automating credit card limits to delivering a fully digital onboarding process for members.
Begin your journey with us and streamline your card application process. Contact us today.