Three credit unions have received the highest Fairbanking Mark from The Fairbanking Foundation as the Archbishop of Canterbury, Justin Welby uses the announcement to urge more people to consider joining their local credit unions
The Fairbanking Foundation - the not-for-profit charity dedicated to encouraging banking institutions to improve the financial well-being of their customers – has awarded its first Mark certifications to credit unions. The Central Liverpool Credit Union, London Capital Credit Union and the Enterprise Credit Union have all received 5 stars for their personal loan products.
Archbishop of Canterbury, Justin Welby, said: “These awards represent an enormous vote of confidence in these credit unions, showing the service they provide is excellent as well as fair. I hope and pray that today’s awards will inspire more people to join credit unions, which have a very important role to play in making banking more transparent and fair, and in setting an example to the rest of the sector. I also hope the awards encourage more credit unions to apply for Fairbanking Marks, so that it is clear for all to see the valuable service they are providing to local communities across the country.”
Antony Elliott, Chief Executive of The Fairbanking Foundation explained more about the Fairbanking Mark: “Our quality mark programme is an important step in helping customers to identify products that have been rigorously tested for the financial well-being they can deliver. Crucially, it also provides a powerful incentive for financial institutions of all sizes to compete through continual improvement of their products in ways that will truly benefit their customers.
We are delighted to award Marks to these three credit unions and we hope that this will encourage others to come forward and apply for our Mark. We are seeing strong uptake of the scheme in the market at the moment and we very much look forward to announcing further participants of all sizes as the year progresses.”
In order to receive this award, the credit unions had to demonstrate that their personal loan customers have experienced a tangible positive impact on their financial wellbeing from using the product features. These features include budgeting support, encouragement to prepay, providing support at the earliest opportunity and developing a savings habit. In addition to reviewing the financial well-being characteristics and features of the product, the process of assessment involves independent research carried out with a representative number of customers holding that product. This research is carried out to test the extent to which the theoretical benefits to financial well-being are delivered in practice.
Central Liverpool Credit Union's Share-based loan and Helping Hands loan products were both awarded five stars. Credit union CEO Eileen Halligan said: “Financial well-being is central to all of the products we offer, and this is reflected in the fact Fairbanking’s research with our personal loans customers reveals that many have one or more other products with us. We strive to be as transparent as possible and offer tools and real people for customers to talk to if they have any financial concerns around our products and are delighted our Share-based loan and Helping Hands loan have been awarded five stars. We also strive to be as competitive as possible, so it was pleasing to see that of the personal loan customers interviewed by the Foundation, 48% said that the loan rate we offered them was lower than they had expected, and only 3% said it was higher.”
Karen Bennett, CEO, Enterprise Credit Union also commented on the importance of promoting members financial well-being: “We are delighted to receive a mark from the Foundation for our personal loan product. As a credit union we are here to provide the best service to our members, so we very much put people ahead of profits. With this in mind, we can design products that are not only competitive, but which also have features that provide valuable assistance to members in terms of how they manage their money and improve their overall financial well-being.”
Whilst Martin Groombridge, CEO, London Capital Credit Union emphasised the value of a holistic approach to helping people with their money : “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.”
The Fairbanking Foundation is a not-for-profit, research-based charity established in 2008 to encourage and assist providers of banking products to improve the financial well-being of their customers by enabling these customers to manage their money better. The Foundation does this through a combination of thorough consumer research to better understand what drives financial well-being, assessment of existing core banking products against this understanding, and the operation of the Fairbanking Mark certification scheme, now accredited by UKAS.