Bank exits create 'clear opportunity' for credit unions to grow market share

Research shows that 82% of the public fear falling competition in the banking sector will negatively impact consumers

"Unsurprisingly, the recent exit of retail banks is something that consumers are worried about, said Metamo CEO, Alan Kelly. Photo:Leah Farrell/RollingNews.ie

As the Irish banking market becomes increasingly concentrated following the exit of KBC and Ulster Bank, credit unions have been given a "clear opportunity" with almost one quarter of people considering opening accounts.

Research conducted by Amárach on behalf of Metamo, a joint venture between 16 of Ireland’s largest Credit Unions and Fexco found that 82% of the public fear that the decrease in competition following the exit of pillar banks will negatively impact consumers.

Additionally, the fallout from these bank exits have led to 44% of credit union account holders increasing their use, with Metamo calling for increased collaboration in the credit union sector to tackle attract customers.

An improved digital service offering was considered the most important thing to attract consumers to credit unions, ranking ahead of both lower interest rates and a greater insurance product mix.

"Unsurprisingly, the recent exit of retail banks is something that consumers are worried about, said Metamo CEO, Alan Kelly. "Many credit unions are challenged to bridge the gap to compete with other financial services institutions."

"Credit unions have an opportunity to play a greater role in the banking ecosystem however they must innovate to meet consumer needs."

The results of the Amárach survey will be discussed today at the launch of Metamo's Quantum AI Lending system, which uses AI insights from each credit union’s past loan data along with open banking, CCR and standard underwriting rules to deliver faster and more efficient personal loan approval.

"The adoption and integration of Quantum AI will enable credit unions to compete with larger service providers such as banks, while retaining the personal element that is a crucial component of credit unions,” Mr Kelly added.

Speaking ahead of the launch, David Malone, CEO of the Irish League of Credit Unions, commented, “The continued digitisation of the credit union sector serves to further enhance the customer service credit union members experience. 

"The Irish League of Credit Unions recognises the importance of combining 'tech' and 'touch' to offer a full range of choices to members in credit unions across the country."