ISSN 2058-3257 May 2021

VIEW FROM ACROSS THE POND WHAT’S INSIDE?

THE DASH to DASHboard The Credit Union view Credit Unions say goodbye to Kelly Wagner-Grull, Director of naturally require many of the legacy technology (Page 2-3) Innovation at the Credit Union of smaller FI’s to conform into Colorado explains that traditional more niche offerings, mergers or risk- CREDIT UNIONS IN THE NEWS credit union income streams will be forced acquisitions. required and was highlighted by the Latest news and views from Credit tested, and that ultimately, forced current pandemic. In many ways, Unions across the UK (Pages 4-9) change will come from pressures What are some of the challenges the pandemic is a great example of of non-traditional financial service you face in what is a fast-changing being able to capitalize on some of providers and sophisticated/nimble industry? It is no longer novel to the pre-work which was already in On Community Banking and PAYMENTS INSIGHT FinTechs. say consumer’s expectations are play with our remote work strategy, Alternative Payments Open Banking to BNPL - what will growing, as the new norm has an digital service improvements, and affect the sector in 2021 (Page 10) What community does your Credit upward trajectory with no limits in adaptability to shift resources based May 2021 Union/Community Bank serve? sight. on member demand. Credit Union of Colorado has the great pleasure of serving 146,000+ These elevated expectations Is working with partners part of CREDIT UNION BANKING people, from all walks of life, who create inherent challenges for any your strategy? Given that many Real-time Transactins and Reports enjoy the benefits of membership in financial institution to keep pace credit unions do not have endless Lower Cost Faster Payments a credit union that is worth over $1.63 with experiences being offered by technology budgets, partnership is Direct Debit - Send Cash via sms billion in assets. large tech-based organisations. We a key strategy to meeting rapidly Maximum Funds Protection understand technology interactions increasing member’s technology FULL DIGITAL MEMBER EXPERIENCE Founded in 1934, we continue to with our members must be intuitive, interaction demands. welcome and support our broad and easy, and consultative experiences. Digital Onboarding Automated Loan Applications diverse membership. Credit Union of Colorado continues Streamlined Member Communications E-KYC/AML/PEPS/Sanctions Checks Levering data is and will continue to Affordability/Credit Checks to build relationships with start-ups, Simple, Compliant (FCA, PCI, GDPR) Powered by Engage Do you think the role of Credit Unions/ be a key tool necessary to be able to FinTech’s and will consider use cases YOUR CREDIT UNION BRAND Community Banks is changing? create meaningful, actionable and where outsourcing and/or alternative The financial landscape is evolving memorable member insights. third-party solutions can enhance rapidly, and I anticipate our industry our ability to experiment with options

Branded Credit Union Accounts will look very different in five, seven, Millennials and future generations are to move more nimbly. This includes Credit Union Digital App DEBIT CARD SERVICES Full Ownership of Account Funds or ten years from now. already redefining how money works prototyping, piloting and iterative Member Recruitment Drives Award Winning Engage Account Local and National Rewards within our ecosystems. Their desire design of solutions. Credit Union Branded Cards GAME CHANGING SOLUTIONS The weight of technological to be less debt driven and open to Credit Union Credit Card Seamless Integration - One Touch Responsibility Instant Issue Prepaid Card disturbances, growing consumer a more collaborative consumption Digital channels or branches – which Dedicated Support and Expertise behaviours, rising non-traditional model where autonomous vehicles, is more important? Tough question... FCA Certified - PCI-DSS level One Secure providers entering the industry, “uberization” of services and goods physical branches in my opinion will Maximin Compliance Protection competition for business, and are all key indicators to how we need always have an important role and amplified regulatory demands will to evolve our business model beyond may shock us at how relevant they force redefinition of our financial “a checking or loan” provider. are in, say 10 years. While saying ecosystems and business models. this, becoming a fully digital delivery How has the pandemic impacted channel must compliment the Credit union and community banks’ the way you operate and your branching model. traditional income streams will future strategy? The pandemic has be tested and require innovative reinforced the importance of our The gift of choice between branch thinking and leaps of faith on core values and strengthened our and digital will become one creative solutions. commitment to be a safe, secure, interaction, with a seamless cross and stable financial partner with our between channel, resulting in a Lending channels continue to members. The current times allow “hybrid” member. be vulnerable to disruption and our corporate social responsibility to CLOUD BASED BACK OFFICE ultimately forced change will come shine in how members and our larger Measurement of success and from pressures of non-traditional community are supported. longevity will come from the financial service providers and ability to offer superior end-to-end sophisticated/nimble FinTechs. For times when job losses arise, death, experiences, without a human or other traumatic life challenges interaction, yet if needed is one Credit Union technology goes from The financial commitment to deploy occur, we will continue to operate in button (or branch) away. technology that will satisfy members, consistent, safe and relevant ways. explicitly to meet the younger Ensuring that our members can Source: Lisa Moyle: Fintechtalents. Feb 2021. For obsolete... to absolute member’s expectations, will access services in a remote way is the full article visit www.fintechtalents.com Engage DASHboard™, the revolutionary end-to-end cloud based Credit Union solution is now available> Already Engage are working with a number of UK Credit Union partners to replace their outdated legacy payments Focus is published by Engage. Head Office: Navigation House, Belmont Wharf, technology with the newest, most advanced digital back office and member services solution available. urnT to Skipton, North Yorkshire BD23 1RL. Engage account @EngageBanking pages 2 and 3 for further details. www.engagecommunitybanking.com

© Copyright Contis Group 2020. Registered in England and Wales number 06499022. Contis Financial Services Ltd is authorised by the Financial Conduct Authority to issue eMoney (Firm Reference Number: 900025) and is a Principal Member of Visa Europe. Engage - The National Brand for Community Banking May 2021

NEWS FROM ENGAGE EVOLVE... EMPOWER...ENGAGE It’s curtains for out-dated legacy Credit Union software - Engage launches new

digital end-to-end cloud based p ayments and back office platform

Engage’s new digital payments and The technology eco-system is fully bonus for those Credit Union’s who Comprehensive cloud-based back back office solution, DASHboard™, integrated with the award-winning previously found their back office office solution is the definitive community banking Contis payments platform, offering technology budgets affected by SMS Bank Mobile App Accounts Budgets Projections platform. maximum stability and reliability, and changes to the benefit payment The cloud-based DASHboard™ Push not’s Reconciliation provides Credit Unions of all sizes with systems or increased regulations. core back office delivers time- Single Nominal/ Trial Bal. The only true end-to-end system instant access to a wealth of low- saving workflows across all Member Area Members customer CRM General Bal. Sheet developed exclusively for the Credit cost, innovative payment solutions. The DASHboard™ solution was loan applications, member View Ledger P&L Union sector, DASHboard™ delivers launched on 4th March 2021 with communication, marketing and Quarterly Financial Data Human Onboarding Loans a fully configurable and future proof Importantly, DASHboard™ has over 70 delegates attending the product building. Return Reporter Exporter Resource cloud-based digital payments, back- been built with a big emphasis on initial 90-minute demonstration Marketing Campaign Event Performance Applications Credit SAR Appraisals office and member services platform helping Credit Unions to remain showcasing the powerful new The functionality is powered by Control Reporting Module Builder Triggers Profiling designed to significantly reduce staff both sustainable, and to empower Engage features and Credit Union Caroma - a platform that boasts Mapping workloads and running costs. them to compete with the better benefits on offer. over 25 years experience of Document Custom Product Analysis KPIs and Report funded fintech rivals and big banks. working successfully with Credit Signing Letters Builder Dashboards Scheduler Analysis Board DASHboard™ comprises 5 individual Engage has gone to great lengths to Due to huge demand, Engage Unions, community banks and Loan Notice Internal Surveys meetings Training Documents Board Messaging modules that together form the ensure the platform provides simple will now be holding further online micro-finance institutions across the Actions end-to-end solution. Alternatively, to use yet unlimited digital account demonstrations for individual Credit world. as each module benefits from API and product building capabilities, Unions throughout April and May. Cloud based excellence: Key functionality Document within the DASHboard core back office Library module has been designed exclusively for connectivity they can be provided facilitating exciting new revenue Innovative accounting and Credit Unions over a 25 + year period as stand-alone solutions too, giving opportunities for all users. CEO’s, directors, shareholders, business planning modules make Credit Unions full control over the credit union staff and volunteers are bank reconciliation, financial level of integrations based upon The need for expensive future are all invited to attend an online reporting, budgeting, performance of taking full management their own individual budgets and development work and ‘add-ons’ presentation to see first hand what analysis and year-end tasks quick control of Engage accounts technical requirements. has also been eliminated. Users of DASHboard™ offers. and simple. and funds, eliminating the the platform benefit from continuous need load external master updates at no extra costs - a real Digital member solutions Lowest cost real-time payments accounts. solutions Frictionless onboarding and speedy Alternatively, Credit Unions digital loan applications remove all DASHboard™ provides Credit can choose reap the time-wasting processes and provides Unions with access to the most financial benefits of issuing members with a seamless and comprehensive range of payments their own accounts with CU satisfying Credit Union experience. services at the lowest possible fees, branded debit or pre-paid with savings up to 70% possible cards. This provides an Advanced member services - 24/7 - on all Credit Union commercial ideal solution for unbanked 365 days a year banking costs, including: members, those looking for an alternative to a high street bank Comprehensive member area and - Faster payments account or when working with local digital open banking mobile app - Direct Debit authorities, charities and payroll simplifies money management. - Standing Orders partners. - CHAPS compliance experts. The platform Instant notifications, secure - PayPoint National campaigns and regional is fully regulated, delivering FCA, document uploading, built-in KYC/ - Post Office Payments Credit Union membership drives PCI and GDPR protection across all AML, PEPs and Sanctions checks, - Cash via sms (Engage PIN4Cash) processes and boasts an enviable credit checks and e-signing all work - Request to Pay The campaign module provides track record of reliability (99.99% to help achieve a c.35% increase - Peer to peer payments funded awareness campaigns and uptime). in lending activity across existing regional membership drives to attract membership. Debit card and current accounts new, qualified lenders to the credit To attend an online demonstration union as well as to raise awareness with your team - including a full Automated lending and onboarding Most Credit Unions will already of the great work undertaken by the overview of DASHboard™ end to be familiar with the award movement across the UK. end capability, fee information Sophisticated affordability checks winning Engage account and the and details of what is required to and decision-making tools allow advanced benefits and revenues Full support and peace of mind migrate from your existing back automated decisions based on the product delivers for both them office provider contact: Geoff members credit history, income/ and their members. Finally, Engage DASHboard™ is Leech, Managing Director on 07719 expenditure and your own internal fully supported by a 100+ strong 549 612 or email geoff.leech@ policies. Now Credit Unions have the option team of payments, technology and engageaccount.com.

2 3 Engage - The National Brand for Community Banking May 2021

CREDIT UNIONS IN FOCUS CREDIT UNIONS IN FOCUS

Stockport Credit Union loan book Clonard Credit Union has Seafarers’ charity and Commsave reaches record high during lockdown opened sixth N.I. branch launch scheme for

At its recent AGM to discuss the 2019- “We’re so proud of the help we’ve fishing families 2020 financial year, Stockport Credit been able to offer the people of The charity commissioned a report, Union confirmed that more people Stockport when they needed it most. Fishing Without a Safety Net, which than ever before have turned to it for found that that new interventions financial support as the devastating “Last year more people than ever are needed to create a better effects of the Coronavirus pandemic joined us and started benefiting from financial safety net for fishing began to bite. using our services, whether it was to families. help cover the cost of IT equipment A record 1,108 new members joined, for home-schooling or to pay for In response, Commsave Credit up 44% on the previous financial year school uniforms, our members have Union opened its services to the UK with the Stockport mutual having been helped in so many different fishing community on 15 April. grown its loan book by 14%. ways. In January, its members agreed to It ended the financial year having “As people’s finances suffered during support the UK’s fishing community lent a record amount of money, Lockdown, we’ve seen a huge by extending the credit union’s processed a record number of loans, increase in the number of people CCU chief executive Ruth Clarke and Mayor of affordable financial services to North Down and Ards Trevor Cummings added a record number of members, turning to extortionately expensive Stockport Credit Union CEO Jonathan Moore all fishers, fish processors and and with the loan book at a record ‘Doorstep Lenders’. fishmongers throughout the UK. high. people to access credit and that’s Clonard Credit Union (CCU) has insurance and free £2,000 death “These loans are often totally where Stockport Credit Union is launched its new Holywood branch, benefit insurance. Regulatory approval has been “This last year has been incredibly unregulated and have interest rates helping most.” growing its portfolio to six branches. obtained and the credit union is difficult for everyone”, said CEO as high as several thousand percent. It is the only credit union in Ireland to now open to workers throughout Jonathan Moore. There are far cheaper ways for Source: Marketingstockport.co.uk. April 2021 Ruth Clarke, chief executive of CCU have its own debit card. the fishing industry. Credit Union, said the organisation now has over 22,000 members. All members of the former Holywood The Seafarers’ Charity has awarded Credit Union will automatically a grant to Commsave to support The new Holywood branch at Church transfer over and become members the development of its new Ten Charities benefit from Pennine Credit View in the town centre was formerly of CCU Credit Union. services for the fishing industry occupied by the Holywood Credit and the credit union has created Union. Ms Clarke said: “Our aims are to financial products designed to suit Union cash promote thrift among members by the financial needs of fishers. These A TOTAL of £8,500 has been given Ms Clarke said its former employees the accumulation of their savings include: to 10 charities thanks to an East were now employed by CCU, and and provide loans for the benefit of Lancashire community credit union. that there would also be new jobs. members at a fair and reasonable Stormy Reserve Fund – a savings rate of interest. In the last financial account in which money can be Among the good causes receiving She added: “We are here to serve year we issued loans totalling £11.26m accessed immediately at times funding from Pennine Community the people of Holywood and the to our members.” when unable to earn an income. Credit Union include: surrounding area, including everyone living and working in postcodes BT18, The new branch was opened by HMRC Budget & Bill Payment Pendleside Hospice, Georgia Fourie BT19, 20, 21, 22 and 23. Trevor Cummings, Mayor of Ards and account – enables regular amounts Butterfly Fund, Age UK Burnley and North Down. to be set aside to pay the annual Pendle, Colne Citadel, Depher “The opening of our new branch tax and National Insurance bill. CIC, Pendle Forest Hawks Junior in Holywood is a statement of our The first CCU branch was opened in Football Club and three foodbanks popularity and our continued growth, Clonard in west Belfast in 1964. It now Special loan scheme to support in the communities the credit union and is a positive development in has six branches in total, including access to government grants operates - Colne Open Door Centre, the midst of the severe economic four in Belfast, one in Bangor and the that require an up-front capital downturn caused by the Covid-19 latest addition in Co Down. contribution. Nelson Churches in Covenant, Photo: Dr. Chris Ainsworth and Christina Cope from the Hospice Burnley Community Kitchen. pandemic.” annual running costs have to be met hospice, as well as the delivery of Credit unions are not-for profit Commsave pays a competitive Pendleside Hospice’s Dr Chris by fundraising or donation, so all specialist and holistic palliative care CCU’s full banking service includes financial co-operatives owned and annual dividend on members’ Ainsworth shared that their donations are gratefully received.” which addresses patients individual an online banking app, online loan operated by members. savings and, for the current fundraising has been impacted as a needs. applications, debit card, online financial year, expects the return result of the pandemic. The donation provided by Pennine money transfer and direct debit on members’ savings to be 1.5%. It Credit Union will assist in funding Source: Robert Kelly: Lancashire Telegraph. facilities, foreign exchange, free loan Source: Emma Deighan: Belfast Telegraph also provides a free bereavement He said: “Three-quarters of our the additional beds needed at the April 2021 protection insurance, free life savings March 2021 fund for all members.

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Engage - The National Brand for Community Banking May 2021

CREDIT UNIONS IN FOCUS

of Cornwall, the actor Michael Sheen the internet, let alone smartphone at the 42.6 per cent APR cap and A review of 40-year-old rules may shake and the Archbishop of Canterbury, banking, was welcomed by whether it ‘allows credit unions to Justin Welby. campaigners and chief executives fully serve the subprime part of the alike. market.’ up the Credit Union sector - and help it And the narrative such ethical local lenders can fill the void left by the “I 100 per cent welcome the review’s This recommendation was welcomed demise of the likes of Wonga and recommendations’, Paul Norgrove by Capital Credit Union’s Marlene lend more help more disadvantaged borrowers said, ‘the 1979 Credit Union Act is Shiels, but some are more sceptical access credit is one plenty would like older than me.” as to whether this would have a real Regulators are now potentially to buy into, even if it has yet to come impact. preparing to rip up the rulebook. true. Robert Kelly, the chief executive of the trade body which represents 169 Robert Kelly’s predecessor as chief At the same time the Treasury has Only last year, the chairman of the credit unions in England, Scotland executive of the Association of British handed out hundreds of thousands of Financial Conduct Authority, Charles and Wales, said ‘a big priority’ Credit Unions told MPs in 2016 that as pounds to Credit Unions to help them Randell, gave a speech titled: “Is this was reviewing the legislation and many as 80 per cent of applicants to digitise and attract younger members the decade of the credit union?” regulation governing the sector. credit unions could be turned down, with Kelly himself telling This is Money A company which began life in 1985 He said: “The need for more “The reality is the regulatory the focus on ‘responsible credit’ as a way for serving police officers to sustainable community based environment has restricted credit meant co-operatives were ‘not pool their Christmas savings might not finance is huge. unions in terms of transformation and throwing money out the door’. sound like the ideal recipient for a innovation. £200,000 prize aimed at developing a “The transformation that the credit Peter Tutton, head of policy at new generation of fintech lenders. union sector needs to undergo if it “The FCA has said credit unions StepChange Debt Charity, said the is to meet much more of this need can offer basic savings and loans. review raised questions about wider Yet that is exactly what happened to is huge. But the benefits of doing so We’ve argued for the capability social policy. Police Credit Union last March. could be huge as well.” to offer car finance, credit cards, insurance facilitation, as well as more “Wider access to suitable credit The member owned co-operative, And this time it really could be collaboration.” can help people who can afford which has grown to 34,000 members different. to borrow on commercial terms’, since its founding in 2002, was Marlene Shiels, who sat on the he said, ‘but there’s also another handed the cash from a Treasury- Not least because a 68-page review review’s advisory panel, added: “We important cohort of people who backed fund so it could help those in into Britain’s unsecured credit market have the most restrictive legislative need cheaper and better ways of the police, armed forces and other authored by the FCA and published framework of any country, it’s being able to meet their necessary public services cut the cost of their this month has thrown its weight important that’s changed. costs.” “We saw a lot of people going into “We’ll have an aging membership borrowing as their financial habits behind the most substantive reforms the military with thin credit files, many (the average age of a member is improved. to the system since it was formalised “We need to be able to offer more The charity called for a no interest had gone to a doorstep or payday 47) otherwise. We’re trying to attract at the end of the 1970s. for our members beyond savings and loan scheme to help ‘those in the lender and didn’t know we existed. younger people and digitise.” And it was not the only one. loans. most financially vulnerable positions.’ Many more predatory lenders were “Despite positive efforts to better at raising awareness through And attracting younger members is Despite their age, credit unions have encourage more alternatives to “Credit unions currently have one But those from the sector who spoke Google”, he said. not the only struggle credit unions been around since 1960 and can high-cost credit, the market has not source of income, that’s not a great to This is Money felt the review’s face. trace their roots back to the 18th delivered at scale, and further reform strategy for building a substantial recommendations, coupled with “Wonga made us all sit up and go century, two of the three winners, is needed’, the review stated. business, we need to be able to the Treasury-backed grants from ‘why did they go there and not to Although membership of around 400 and four of the six finalists, of the compete and diversify.” Nesta, were a step in the right us’. We’ve spent the last two years co-operatives in Great Britain and £200,000 prizes were credit unions. “This includes liberalisation of the direction in allowing credit unions trying to refine our approach, to Northern Ireland has grown from approach taken to regulating credit Credit unions made £210million in and community finance to help more improve our digital offering and 1.85million in 2015 to 2.07million in The hundreds of thousands of pounds unions and to encourage more income in 2019, according to figures borrowers of all stripes. minimise that friction so we can be 2019 and the number of loans by a are designed to enable firms like PCU mainstream lenders to participate at from the Bank of England - the vast available when our members need similar level, chief executives and to ‘find innovative technological lower costs in this part of the market.’ majority, 83 per cent, came from “We can play a more prominent role, us.” regulators alike have raised concerns solutions to increase access to loan interest. ‘There has been an of course we can, and we should”, the sector is being held back. affordable, responsible credit’, It added: “Credit unions offer an increasing dependency on the Kelly said. ‘We should absolutely have It is also about trying to attract new according to Nesta, the firm behind important alternative to high-cost interest paid on loans”, it noted in its a more prominent place in building blood to co-operatives which can be Credit unions have long been the ‘Affordable Credit Challenge’. credit and enable wider financial latest statistics published last July. financial resilience in the gaps where dominated by older savers. popular for their community ethos; inclusion. To fully realise their potential irresponsible lending has taken place. all members must have saved with For Paul Norgrove, the chief there is a case for removing some Marlene Shiels, the chief executive a union and be united through executive of PCU, which operates of the current restrictions on their And while credit unions versus “I’m not going to say we’ll fill it of Capital Credit Union, which serves a ‘common bond’, which may under the wider umbrella of the Serve activities.” payday lenders is not a zero-sum completely, but I think we can do 24,000 members in eastern Scotland be geographical, like Capital, or and Protect Credit Union, 2016, that game, unions offer savings accounts much more.” and was one of the other winners professional, like Serve and Protect. is largely about making more people Its call for the Bank of England, and payroll deducted savings, a of the £200,000 grant, said: “For aware they exist, and reducing how FCA, Treasury and Northern Irish variety of lower cost loans and even members who want to go digital this High-profile backers of such co- long it might take prospect borrowers Government to look at legislation mortgages in some cases, the review George Nixon: thisismoney.co.uk - February funding was vital for transforming us. operatives include Camilla, Duchess to get a loan. published before the advent of also called for regulators to look 2021

6 7 Engage - The National Brand for Community Banking May 2021

VIEWS FROM THE NEWS CREDIT UNIONS IN FOCUS 2021 CFCFE conference showcases ABCUL publishes key policy successful Credit Union mergers asks for Scottish Parliament

How to conduct successful mergers ABCUL has published its key policy Supporting credit unions to improve was a key issue at the Centre for asks to all Members elected to the their digital offering. Community Finance Europe’s (CFCFE) Scottish Parliament in 2021 to support conference last month. Credit Unions in Scotland. Collating Much of the credit union sector is the views of ABCUL members, in in need of digital transformation, to The online event explored how terms of policy asks for Parliamentary keep up with technological change mergers are a useful strategy to elections in May, it has listed five key and reach a wider audience. strengthen credit unions, with inputs areas that Government can support from Michael Byrne, a director of the movement: However, many credit unions would Building Initiatives, we ask the Scottish Core Credit Union in Dublin; Michael require financial and logistical Government to encourage local O’Reilly, secretary of St Canices Making saving and repaying loans support to undergo the technological councils to promote and utilise the Credit Union in Kilkenny; Caroline via payroll deduction a standard changes needed to remain relevant. credit union services in their local Long, CEO of Limerick & District workplace benefit for people across area. Credit Union; and Robert Kelly, CEO said that it was also important to “An important part of every merger Scotland. Promoting credit unions as an ethical, of the Association of British Credit allocate the right level of resources to is to listen carefully,” he said, adding affordable financial service for Commenting on the Association’s Unions (ABCUL). a merger, to avoid some staff working that staff concerns about potential It has been evidenced that payroll everyone, from all walks of life. policy asks, Head of Policy, Risk two jobs at once. job loses or those of members deduction is an effective method and Compliance at ABCUL, Natalie Mr Byrne stressed the importance of around the loss of identity should of incentivising people to repay For the Scottish population to widely McQuade said: “We urge all viewing credit unions as equals, even Caroline Long talked about Limerick also be addressed early on before loans and build personal savings. A benefit from the use of affordable Members elected to the Scottish when those merging are different & District Credit Union’s experience, progressing any further with a merger. step towards making this practice financial services, there must be a Parliament in 2021 to support credit sizes. Core Credit Union was formed which was formed in 2012/2013 commonplace in Scotland would greater awareness of the credit union unions in Scotland and acknowledge after the amalgamation in 2014 of through the merger of several Robert Kelly provided an overview be to encourage all Public Bodies sector. We ask that credit unions are the important role credit unions can Dalkey Credit Union, Sallynoggin local credit unions who wanted to of the credit union sector in Britain, and procured organisations to offer brought onto Scottish Parliament’s play in policy solutions. / Glenageary Credit Union and offer members a wider range of where mergers have reduced the their employees payroll deduction, agenda and actively promoted by Shankill, Ballybrack & District Credit services. In the initial stages of the number of credit unions over the past through partnerships with credit MSPs as providers of fair financial “Scotland leads the way in Great Union Ltd. merger, the credit unions focused 20 years. unions. services for everyone. Britain for levels of credit union on building a common culture and membership. Over 7% of Scotland’s The mergers helped the newly aligning their policies. As part of this, In 2020, ABCUL its launched Vision Supporting the growing need for Creating an environment where population are members of a credit formed credit union attract new staff from each credit union visited 2025, which sets out its role in reform of the current insolvency credit unions can play a key delivery union with over £650m in savings. members and increase its loan each other’s offices and highlighted driving the movement forward. regulations. role in Community Wealth Building book. Core Credit Union has 35,000 red-line issues. Members were also ABCUL developed the strategy Initiatives across Scotland. “The Scottish Government has been members, €140m in assets, €45m in consulted about their emotional from a member consultation, where The current insolvency regulations a great supporter of credit unions for loans, €75m available to lend and 45 attachment to local branches. responses saw a role for the apex for Scotland result in many debtors Credit unions can meaningfully many years and we will be delighted local employees. in coordinating and supporting entering unsuitable debt solutions. contribute to wealth building within to see it continue its support for Collaboration is another alternative strategic mergers. We ask for reform to create communities, by leading on financial the role of credit unions to provide As part of the merger, the three and it can also help smaller credit insolvency options for debtors that inclusivity and providing affordable access to affordable and ethical credit unions created a new nine- unions access share costs and ABCUL is currently developing a are tailored to the needs of debtors, financial products on a local basis. financial services.” member board, three from each purchase services together, added white paper, which will look at various whilst remaining fair to all parties In order to utilise credit unions credit union. They also worked Ms Long. aspects of strategic mergers. involved in a debt solution. potential for Community Wealth Source: ABCUL on building trust across the three organisations, with staff from different Michael O’Reilly shared St Canices “For too long mergers have been a credit unions visiting each other’s Credit Union’s experience, which taboo,” said Mr Kelly, warning that offices and understanding processes. underwent a series of member-driven mergers often come too late, as Tenants will continue to receive mergers, and now serves all the takeovers in times of distress, rather “Culture is what makes or breaks a people who live or work within the than strategic decisions. financial support in Wales merger,” he said. wider geographic common bond With many continuing to live on reduced incomes and concerns about a areas of Kilkenny, Carlow, Laois and Dr Paul Anthony Jones, Director of spike in evictions, the Welsh Government has announced that the Tenancy “Advantages of the merger include Tipperary. It is the largest community- Research at CFCFE, said: “One of Loan Saver (TSL) scheme will be extended until 30 September 2021. scale, drawing together greater based credit union in Ireland with the things we know about change is expertise and different skills and more than 65,000 member-owners. that it’s not easy, it’s disturbing, often TSL was launched in October 2020 for tenants who experienced a better succession planning. resisted but if done well, managed temporary change of income during the pandemic. The Welsh Government Mr O’Reilly’s tips for a successful well, implemented well, as the is looking for several ways to improve the scheme to increase the number In addition, Core Credit Union can merger include appointing a project panel demonstrated, it brings about of applications and people receiving the payments, including better invest in new products, improve manager to deal with the merger tangible benefits for our members.” communication to tenants and landlords and working with credit unions to efficiencies and marketing and cover and seeing the credit unions involved improve access. a wider area, added Mr Byrne. He as equal partners. Source - Co-op News

8 9 Engage - The National Brand for Community Banking May 2021

VIEWS FROM THE NEWS VIEWS FROM THE NEWS Payments insight: How open banking is FCA to regulate BNPL sector as Brits driving payments innovation struggle to pay back Xmas spending

Banking has traditionally been an Add to this the shift to e-commerce enhance real-time payments, going The UK’s Financial Conduct Authority BNPL were already in arrears. people are now really feeling the industry slow to change. Our very during the pandemic - which has head to head with the card scheme is to introduce new rules for buy now, strain. Our findings show that this has concept of a bank has, until the last increased the volume of online to enable instant transactions pay later firms amid mounting fears Christopher Woolard, who is chairing unfortunately caught up with some decade or so, remained consistent transactions, monthly subscriptions, between retailers and consumers. of a growing debt burden for cash- a review into the unsecured credit customers who are now having to with the big, high street providers that and growth of digital marketplaces - strapped shoppers. market at the FCA, states: “Changes take on more debt to cover the cost define how we think of banks and and the opportunity for consolidation Request to Pay are urgently needed: to bring of their Christmas spending.” banking. services has never been clearer. While UK consumers can already The BNPL industry has seen huge BNPL into regulation to protect access faster pay on mobile to growth in recent years, with the likes consumers; to ensure that there is The survey chimes with recent Of course, the advent of digital Simplifying payments make real-time payments from one of Klarna and Affirm becoming multi- secure provision of debt advice to research from Capco which found payments and mobile banking This is where open banking comes account to another, open banking billion dollar giants, while banks are help all those who may need it; and that more than half of 18-34 year olds quickly changed all that. But while into play. Introduced in 2018, will take this technology one step also increasingly getting in on the to maintain a sustained regulatory using BNPL have missed a payment we’re now used to banks as virtual alongside new PSD2 regulation, open further using Request to Pay (RtP). action. response to the pandemic.” and nearly two thirds think BNPL is entities, open banking is now banking grants access to financial making them spend more, potentially redefining this understanding once data to third-party developers Users will be able to proactively The use of BNPL products nearly New figures published by increasing their chances of getting again. (provided users give their permission). request payments from other bank quadrupled in 2020 and is now at Comparethemarket.com indicate into debt. accounts. Debtors will receive a £2.7 billion in the UK, with five million that a fifth of Brits who used buy now, The rise of multi-banking By enabling non-financials to notification detailing the amount people using these products since pay later (BNPL) schemes to fund The FCA says the provision of The rise of neo and challenger banks develop APIs around existing banking owed and due date, thus providing the beginning of the coronavirus their Christmas shopping are now debt advice will be critical to a in recent years has led to a surge infrastructure, a host of innovative both businesses and consumers with pandemic. unable to meet their repayments sustainable market in the long term, in the provision of accounts and new services and applications are a flexible way to reconcile accounts. without taking on more debt. especially through the recovery services available. now improving the customer However, there is growing concern from coronavirus. “Free debt advice experience. Needless to say, request to pay that consumers are taking on debt Almost a third of respondents using services need secure, long-term It’s not unusual for consumers to have has the potential to revolutionise they cannot afford. a scheme feel BNPL made them funding as demand increases to as multiple banking relationships for These ‘universal apps’ aggregate invoicing and regular payments. For spend more than they usually would many as 1.5 million additional cases, loans, credit cards and mortgages. data across multiple accounts into debtors, RtP offers greater flexibility The emergence and expansion of and over two-fifths bought more following the pandemic. one, easy-to-use platform, offering and convenience, by enabling unregulated BNPL products gives extravagant gifts. And this has extended to the point customers a 360-degree view of partial payment options, a better consumers a significant alternative Funding needs to be in place to help where consumers are happy to their spending and simplifying the view of outstanding bills and a to more expensive credit, states A third of people using a BNPL the poorest pay fees when applying have multiple bank accounts ever-growing number of financial simpler way to pay. the FCA, but this also comes with scheme for Christmas spending did for debt relief orders,” states the across different providers for their touchpoints we encounter in our “significant potential for consumer so because they could not afford watchdog. transaction accounts and day-to- daily lives. Meanwhile, payees benefit from harm.” the purchase upfront at the time day spending. greater visibility over cash flow, more and wanted to delay the payment, Lenders will also be required to carry In doing so, open banking has the accurate forecasting, reduced The watchdog cites figures which and 23% say BNPL better suits their out affordability checks on customers Indeed, the ‘unbundling’ of banking power to not only transform the billing costs thanks to the switch to show that more than one in ten financial needs than other forms of and ensure the vulnerable are services has accelerated thanks to way we track and understand our electronic invoicing and increased customers of a major bank using debt, such as a credit card. treated fairly. the growing wave of fintechs, with spending but the very concept of reconciliation. a focus on digital-based solutions, what a bank is and who can provide Over a quarter were also offered On alternatives to high-cost credit, enabling banking to be delivered in our financial services. Savings for merchants a special discount if they used the the FCA says it will work with the a similar manner to software services In particular, retailers will be quick to (Continued from page 10) scheme - as some outlets have Government and Bank of England - i.e. without having to set up an Disintermediating the banks adopt open banking technology, partnerships and discounts with BNPL to reform the regulation of credit actual bank. With the use case for open banking particularly for online purchases. Like the shift to online banking, providers. unions and Community Development beyond question in a post-COVID we’re not going to give up the ‘new Finance Institutions. The barrier to entry to launch new world, it won’t be long until By encouraging a higher volume normal’ now that we’ve become James Padmore, head, money, banking services has lowered, while this technology replaces BACS of contactless and digital accustomed to the benefits and comparethemarket.com, says: “More should be done to encourage at the same time the willingness of payments. transactions, open banking can convenience it brings. This means “When used responsibly, Buy Now mainstream lenders into this space,” consumers to ‘try out’ new services reduce the hidden cost of cash from that the banking industry will have Pay Later schemes can be an the regulator says. “In addition to from non-traditional providers has Open banking allows aggregators mishandling, and other inefficiencies, to break with tradition and quickly effective and alternative way to making sure products are affordable, dramatically increased. such as payroll providers to make with cash-free payments estimated accelerate payments innovation to spread out the payments of large there should be an increased focus payments directly to employees to save retailers £7.2 million a year. keep up with the pace of change. purchases. It’s easy to see why it’s on lenders meeting consumers According to MoneyHub, 42% of rather than through BACS, popular at a time like Christmas when needs’ for as long as they hold the financial management platform disintermediating the banks in the This innovation within the payments The good news is this revolution people may be spending larger sums product. The FCA should review users now have more than one bank processing of direct debits and industry couldn’t be more timely, with is already underway, as open than usual. repeat lending. account, while 65% of challenger standing orders. the pandemic accelerating the shift banking continues to transform our bank customers continue to have towards online retailing as well as understanding of what a bank is “However, the ‘I’ll deal with it accounts with their existing high And the payments revolution doesn’t fundamentally changing the way we and how our financial services are later’ attitude to using this type of Both articles have been reproduced by kind street banks. stop there. Open banking will also work, live and pay. delivered. financing may mean that some permission of Finextra.com 2021

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