BEIS - 2016 Post Office Network Consultation
We would like to use the opportunity of this consultation to highlight the potential for credit union services to be made available through the Post Office network for the mutual benefit of the Post Office, credit unions and the wider public, in particular those unfairly excluded from affordable credit and safe savings facilities. In 2010 the Department for Business, Innovation and Skills conducted a consultation on the expansion of financial and banking services through the Post Office network.
We used the opportunity of this consultation to make the case for credit union services to be made available via Post office counters. Our argument revolved around 4 central points:
- Through the Post Office Card Account and various other Government services the Post Office is uniquely exposed to vulnerable consumers who lack fair and equitable access to affordable and responsible financial services.
- The Post Office link-up with the Bank of Ireland provides a suite of competitive mainstream financial products which are a valuable addition to competition in the market but do not address the needs of low income and vulnerable consumers.
- The Post Office’s universal service obligation ought to extend to the nature of services provided and to whom as much as it does to geographical accessibility.
- Through providing credit union services over Post Office counters, credit unions would be able to access a branch network many times more extensive than bank branch networks making their services more accessible and convenient and the Post Office would benefit from fee revenue and footfall thereby boosting its own sustainability.
We believe the case for this partnership remains as strong as ever. Problems of financial exclusion, over-indebtedness and a chronic lack of saving remain stubbornly high as reported by the likes of the Financial Inclusion Commission, Step Change Debt Charity, The Money Advice Service and the Financial Conduct Authority. Similarly, despite its exposure to key affected demographics, the Post Office’s financial services offer remains firmly one serving the included prime market.
The intervening years have also seen a key development in the credit union sector. Under the DWP’s Credit Union Expansion Project, ABCUL’s subsidiary, Cornerstone Mutual Services, has developed a shared business model built around a banking industry-strength IT platform which 2 credit unions are currently using live and another 33 plan to migrate to. Once fully implemented, this new model of delivery for credit union services – fully integrated with the payments infrastructure through a highstreet bank – will provide the necessary back office integration for credit unions to provide their services through the Post Office network.
Credit union back office integration was a key missing piece at the time of our making the case for a credit union-Post Office partnership in 2010. Now that this possibility is very close to becoming reality, we believe that the time is right to revist the potential for credit union services to be made available throughout the Post Office network for the mutual benefit of credit unions, the Post Office and, most importantly, vulnerable and underserved consumers around the country.
The full PDF version of this consultation response is available to download on the right-hand side