Podcast ¦ RO-AR.com: Tech Innovations Transforming Credit Union Services

Summary

In this podcast, Andrew Duncan, CEO of SOAR, discusses the trends in the credit union and CDFI space. He highlights how the purpose of borrowing has shifted from borrowers seeking loans for home renovations and car maintenance to basic necessities. Duncan also mentions that credit unions are seeing an increase in loan applications, but the loans tend to be smaller in value. He believes people are turning to credit unions because traditional lenders are not serving them due to affordability checks. However, Duncan notes that the credit union movement lacks awareness among the general public and needs to market itself better. He also emphasizes the role technology plays in reducing costs and enabling digital services for credit union members.

Key Points

• Credit union borrowers are now seeking loans for basic necessities rather than discretionary expenses such as home renovations.
• Credit unions are experiencing an increase in loan applications, but the average loan size has decreased.
• The affordability checks of traditional lenders often exclude individuals with good credit ratings, leading them to seek credit union alternatives.
• Credit unions offer competitive rates for lending and savings but have not effectively marketed themselves to the British public.
• Technology is crucial in reducing the cost of serving credit union members and providing digital solutions.
• The adoption of digital platforms in credit unions can be challenging due to fear of technology and lack of IT expertise.
• Inadequate support from technology incumbents and the complexity of IT projects deter credit unions from implementing digital solutions.

Key Statistics

• Approximately 2 million consumers in Britain are credit union members.

Key Takeaways

• Borrowers are turning to credit unions for basic necessities due to affordability checks by traditional lenders.
• The credit union movement needs to improve its marketing efforts to create awareness and gain support from the British public.
• Credit unions offer competitive rates and personalized services but struggle with technology adoption and IT expertise.
• Technology can help credit unions reduce costs and enhance the member experience.
• The credit union market may consolidate in the future, leading to wider common bonds and increased access to consumers.
• Social media and digital communities present opportunities for credit unions to leverage common bonds and expand their reach.
• Credit unions should overcome the fear of technology and embrace digital platforms to remain competitive.
• Collaboration between credit unions and technology providers can support digital transformation efforts.
• Technology incumbents should improve API accessibility to facilitate integration with credit union systems.
• Members’ willingness to engage digitally can drive the adoption of technology solutions in credit unions.