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Tel: 020 7561 1786 (Multilingual advisors available)  •  Fax: 020 7272 8192  •  Email: info@credit-union.coop

Fri 18-Aug-2017
NewsCredit Unions lead the way for banking sector
Print
29 October 2015
Credit Unions lead the way for banking sector
The Fairbanking Foundation - the not-for-profit charity dedicated to encouraging banking institutions to improve the financial well-being of their customers – has expanded its Mark certification scheme to now cover products owned by one in three UK adults.

It has awarded Mark certifications to eight new institutions this year including London Capital Credit Union, Barclays, Halifax, Bank of Scotland and Capital One as well as Enterprise, Central Liverpool and 1st Alliance Ayrshire credit unions, taking the total of financial products covered by the scheme to 25 and including loans and credit cards for the first time.

Success for the charity, which prior to 2015 had approved Marks for products from NatWest, RBS, Lloyds, Saffron Building Society, Secure Trust Bank and Thinkmoney, was celebrated at a London event on October 20th, which our Chief Executive Martin Groombridge attended.

Speaking about the award of the 5 star Fairbanking mark, Martin Groombridge, CEO, London Capital Credit Union, said: “Our focus is always on our members, which is why 76% of our personal loan customers interviewed by the Foundation said that they had one or more other products with us. It is not just about offering competitive and transparent products, but also a range of features and services that help people manage their money better.

“Many in the financial services industry are too obsessed with getting into best-buy tables, but to do this transparency can often be lost with many products offering short term “teaser rates” that can quickly get expensive. People with these products can end up worse off than if they chose another product that takes a more holistic approach to helping customers with their money.”

London Capital Credit Union had to demonstrate that its personal loan customers have experienced a tangible positive impact on their financial wellbeing from using their products.

Archbishop of Canterbury Justin Welby, a patron of the Foundation, welcomed the expansion in a message to the event which said: “This is a real opportunity for the financial services industry to demonstrate its commitment to the financial well-being of its customers, combining its power with responsibility to wider society. We are all acutely aware that we need a change of culture within the banking sector if we are to avoid some of the problems and excesses that led to the financial crash of 2008. As well as developing smart regulation, we also need financial institutions to do the right thing - not because of reward and sanction - but because it is the right thing to do – because it is good for customers and for the wider common good.”

Research for the Foundation however shows the UK’s banking sector is still battling to improve its reputation with nearly two out of five customers (38%) believing the industry’s image has deteriorated over the past year.  Its study found 13% believe the image of banks has deteriorated significantly. The main issue for these negative customers identified by the research is la lack of focus on customer needs cited by 24%.

But there are signs that the mood of customers is shifting with 25% questioned saying they believe the image of retail banks has improved. Nearly one in five (18%) who believe banks’ images have improved say companies have become more transparent while 38% believe banks are now more focused on customer needs.

Antony Elliott, Chief Executive of Fairbanking Foundation said: “Financial institutions are improving their products and behaviours and we may be reaching a tipping point where the reputation of the sector will recover although clearly there is some distance to travel. Increased transparency by banks and an improved focus on customer needs are helping to improve banks’ reputations as our research demonstrates.

“Participation in the Fairbanking Mark scheme can enable institutions to help improve trust in the banking industry based on the proven benefits to customers. The expansion of our Fairbanking Mark scheme to cover products used by one in three UK adults highlights the progress being made. Our research shows that customers’ views of banks are affected when they are helped to manage their money. The existing players need to improve and the new players need to prove they are really better.”

The Foundation has published a report to mark its expansion, “Helping to improve the nation’s financial well-being”, highlighting how financial institutions can engage with it and the products covered which include credit cards, loans, current accounts and savings products. The scheme will expand to include mortgages, student current accounts and children’s savings accounts from the second quarter of 2016.

Said Martin: Credit Unions really are helping to lead the way for the banking sector.

Further information about the Fairbanking Foundation can be found at www.fairbanking.org.uk.



 

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