credit unions

• 7 in 10 people still bank with the country’s three main banks
• Survey reveals digital banking has not overtaken the demand for a more personal experience
• “It is not ok that some banks appear to be trying to force their customers to fit into their lower-cost branch models, in an effort to boost profits for shareholders”

Irish people want to conduct their main banking transactions with a human being and not a computer. This is the finding of a new survey from the Credit Union Development Association, which found that more than 6 in 10 people still opt for face-to-face interactions when opening a current account or accessing car finance, and 8 in 10 want to take out the mortgage with the help of either a lender employee or a broker (See Appendix).

The credit union representatives say indicates just how important face-to-face interaction still is with the public when it comes to banking.

The research, which surveyed 1,000 people nationwide^[1], found:

• More than two thirds (65pc) of those who opened a current account over the last five years did so with in-person support from branch staff.
• 54pc of those who opened savings accounts preferred to do so with in-person support.
• Six in 10 (63pc) used face-to-face help when taking out car finance.
• The vast majority (87pc) of those who applied for a mortgage in the last five years did so either in branch – or in person with a financial advisor.

Speaking of the findings, Kevin Johnson, CEO of CUDA, said:

“The preference for face-to-face interaction doesn’t surprise us and supports the decision of credit unions to retain this key service while rolling out their new digital channels for members. Choice in how to interact with a financial institution is imperative for consumers. It’s not ok that some banks appear to be trying to force their customers to fit into their lower-cost branch models, in an effort to boost profits for shareholders but to the detriment of customer service.

“Borrowing for a major purchase such as a car or home is a big deal for most people, so it is not surprising that so many people need the reassurance of the personal touch when taking out a personal loan or a mortgage. People have financial needs and financial challenges, some straightforward and some requiring quite specific advice, so they should be able to decide between going online and walking into their local branch and getting face-to-face help if they need it.”

Where we bank is changing

The CUDA survey revealed that more than 7 in 10 people still bank with the country’s three main banks.

But Mr Johnson contends that the tide is turning against the pillar banks and,

“There is a definite shift in mindset in recent years and people are becoming increasingly open to the offerings of other providers. This change in behaviour is only going to gather more pace in the next few years and we believe the market will really open up and the Irish banking landscape will look completely different in five years’ time. Credit unions for their part are making a real play to grow their role by offering people the length and breadth of the country exactly what they need – efficient and effective banking solutions, with digital, local and in-person support”.

Further highlights from the CUDA consumer survey include:

• One in 20 (5pc) said they used a fintech such as Revolut, N26 or Bunq for most of their banking needs.
• Those aged between 25 and 34 are more likely than other age cohorts to use a fintech for most of their banking needs – 13pc vs the national average of 5pc
• One in 25 (4pc) use credit unions for the majority of their banking – twice as much as the number who cited An Post.
• Men are more likely to use a credit union or a fintech for their banking needs – though the numbers are still relatively small.

Mr. Johnson concluded

“ As co-operative societies, owned by and managed in the interest of their members, credit unions  understand the importance of setting and achieving service levels at the standard expected by the members.  They are delivering digital services with a personal touch, only in this way, they can be certain that they will achieve high levels of customer experience satisfaction, retain business and also optimise the use of valuable resources. With this in mind, credit unions continue to invest in emerging technologies, as these give rise to new ways of conducting financial activities, while also continuing to invest in their people. Balancing these investments enables them offer both digital and face-to-face options to both borrowers and savers.”

ENDS

Note to the Editor

CUDA

CUDA, the Credit Union Development Association, is wholly owned by credit unions and was legally incorporated in 2003. In its early days, it acted as the representative voice for owner member credit unions, with legislators and regulators. The organisation has since evolved and in addition to providing a ‘voice’, has become increasingly engaged in providing support facilities in the areas of regulatory compliance, risk management, shared services and competency development.

CUDA is a credit union-owned network that enables member credit unions to engage in beneficial activities which would not have proved possible to do as single stand-alone entities.

It manages the diverse interests of members to the mutual benefit of the network. In acting as a catalyst for the growth and development of credit unions, CUDA now makes many of its support services available to all credit unions.

Appendix

1. What type of support did you use when you last opened a current account?*

• Face-to-face in a branch                             65%
• Online digital customer service                 25%
• Call centre/phone service                          10%

1. What type of support did you use when you last opened a savings account?*

• Face-to-face in a branch                             54%
• Online digital customer service                 31%
• Call centre/phone service                          13%

1. What type of support did you use when you last applied for finance to buy a car or other big spend?*

• Face-to-face in a branch                             41%
• Face-to-face in a car dealer                       22%
• Online digital customer service                 22%
• Call centre/phone service                          15%

1. What type of support did you use when you last took out a mortgage?*

• Face-to-face in a branch                             44%
• Advice from independent advisor            43%
• Online digital customer service                 7%
• Call centre/phone service                          7%

1. Which institution do you use for most of your banking needs?

• AIB                                                                  29%
• Bank of Ireland                                             30%
• PTSB                                                               18%
• Ulster Bank                                                   7%
• Revolut or N26 or Bunq                              5%
• A Credit Union                                              4%
• KBC                                                                 2%
• An Post                                                          2%
• Other                                                             2%

*Where customers opened accounts – or took out mortgages or car finance in the last five years.

[1] Conducted by iReach