In this piece, we explore the recent growth of credit unions and how they have evolved in an ever-changing market.
Amid the cost of living crisis, more people are turning to credit unions as their financial provider of choice. In Q4 2023, credit union membership had steadily grown to over two million with loans to members also increasing according to the Bank of England.
This rise shows that the appetite for community-based finance is stronger than ever, with people flocking to credit unions as an alternative to traditional banks.
In this piece, we explore the recent growth of credit unions and how they have evolved in an ever-changing market.
Credit unions - previously underestimated?
As a financial institution, credit unions operate differently from traditional high-street banks. For example, they tend to work within a regional area, be smaller in size and are social enterprises, focussed on doing good. People feel part of a credit union, providing a more community-based financial option.
Credit unions are also known to invest to create positive social impact. And in a world where people are more socially conscious, many are also more concerned about which financial institution they use. Last year, it was reported that there had been a 22% rise in the number of people and businesses turning to ‘social purpose’ lenders.
In this difficult economic period, illegal money lending is on the rise and so the need for legitimate and trustworthy financial institutions, like credit unions, is vital. Lauren Peel, Director of Consumer Insights at Fair4All Finance said:
“While millions of people trust [social lenders and credit unions] for financial help, to borrow and save, lots of people don't know about them. Having access to credit in challenging financial times is part of your financial resilience and simply knowing your likely options should you need financial support can be a huge relief to people.”
Credit unions are also seen as a place that can benefit people regardless of their situation, rather than being exclusively for those at risk of financial exclusion. As a result, credit unions have been able to diversify their offerings to a broader spectrum of people.
What growth opportunities do credit unions have?
With more credit union members than ever before, there are many opportunities ahead for credit unions. This is because they are often providing more personalised customer service that goes further than traditional banking. Also, credit unions help people to understand the cycle of debt, whilst offering support for positive financial wellbeing.
Since the late 2010s, digital transformation has been embraced by credit unions as reported by Coop News. In addition, it became a real focus for members during the pandemic when more people moved away from in-branch banking as face-to-face access was limited.
Here at Great Western Credit Union, we unveiled our digital platform in 2020 to help meet this new demand. In doing this we have made our services quicker and more accessible from anywhere in the South West, whilst increasing the efficiency of new sign-ups. In the future, we will upgrade our digital capabilities further to offer face-to-face services that extend our personalised online service.
How we’re meeting new demand
We have been serving people across our communities for almost 25 years and when members use our services, money is reinvested into their local economy allowing them to do good with their money. Following successful mergers with Stroud Valleys Credit Union and Wyvern Savings and Loans, we provide affordable loans and saving services to over 19,000 people in Bristol, Bath, Somerset, Dorset, Wiltshire and South Gloucestershire.
In addition, we work with businesses through our Money@Work employer partnership scheme, so that their employees can use our services through their payroll and also have the security of becoming a personal member of the credit union.
To get in touch with our team, please email us at info@gwcu.org.uk or visit https://greatwesterncu.org/.
