Published last month, a new report by the Finance Innovation Lab examines the potential the UK’s purpose-driven finance sector, which incudes credit unions, has to expand.
According to the research, there is space for all of the players in this ecosystem to grow, particularly by collaborating and strengthening the collective impact of purpose-driven banking.
Marloes Nicholls, Head of Programmes at the Finance Innovation Lab, says some of the barriers faced by the sector include a lack of public awareness, confusion from regulators who are used to working with bigger and for-profit firms, access to capital, and adapting to an increasingly digital economy.
“Collaboration could go a long way in all of these areas. The government’s own research shows that most people would like their money to do good for people and planet,” she said.
“The purpose-driven finance sector could help if only more people knew about it! We can join forces to raise the visibility of purpose-driven finance efficiently and effectively.
“Our recent survey of community lenders, undertaken with Fair4All Finance and Innovate Finance, found that they typically have an IT budget that’s less than £50k – there’s very little you can do with that. If tech was shared, that money could go a lot further, and they could demand services that align with their values and the needs of customers and members,” she added.
ABCUL spent almost a year consulting with the British credit union sector to create a shared vision alongside a strategy and roadmap to get us there, and digitisation was a key cross-cutting theme.
Through engagement with over 250 individuals from across the sector at ABCUL events across Britain and online – in March 2020, ABCUL CEO, Robert Kelly launched a shared Vision 2025, which opens: “By 2025, credit unions will be digital-first providers of savings, lending and payment products, offering the sort of technology that facilitates the access to products that most people now expect.”
In a guest blog on the World Council of Credit Union’s website, Robert Kelly said: “Digital provision of services is front and centre in our vision for the sector and British credit unions overwhelmingly agree that an increase in the pace of digitisation will enable the sector to overcome some of its key development challenges, including contributing to more efficient operations and reductions in operating costs, easing the journey of consumers to choose credit unions and access to their products and services, and establishing a strong evidence base of who credit unions are currently serving and what their needs are.
“Credit unions in Britain overwhelmingly support partnering with FinTech organisations as the route to achieve digitisation of their service offerings and back office processes, with over 80% of consultation respondents indicating this is their preferred route. ABCUL has committed to supporting its members to effectively navigate the FinTech environment to take advantage of the huge opportunities available to enhance service delivery in highly cost-effective ways.”
Dr Gemma Bone Dodds, Senior Fellow at the Finance Innovation Lab and the report’s Author, expects to see a review of financial sector policy in 2021, which,s he argues, will present a “once in a generation opportunity”.
“We need policy makers and regulators to pay special attention to the opportunities to support the purpose-driven finance sector as part of this review.
“The forthcoming credit union legislative review is the first chance to properly update that regulation since the initial 1979 Act. It promises to enable much more innovation and collaboration.”
You can read the full published report here.
Source – Coop News#News