With social housing residents already far more likely to be marginalised from mainstream financial services and continuing to experience financial difficulties in this tough economic environment, social housing providers are implementing a raft of financial inclusion initiatives.
Most social landlords already recognise that partnerships with local credit unions are a pivotal part of this strategy. Delivering access to financial services by offering a safe and easy way to develop a savings habit, access to affordable credit channels, options to operate transactional bank accounts and support with money management can generate significant benefits for both residents as well as their businesses.
With the prospect of the greatest reforms to the welfare system in over forty years on the horizon, an even greater focus has been put on credit unions and how they can help overcome some of the significant resulting challenges.
Yet, harnessing the potential of credit unions has not always been straightforward for social housing providers, particularly for larger landlords spread over diverse geographical areas. Gaps in the national coverage of credit unions have left large swaths of residents without access. But more importantly, the hugely contrasting individual service and product offers and varying quality of credit unions make it impossible for landlords to offer a consistent and minimum standard of service to every resident.
This has left many struggling to effectively co-ordinate a myriad of partnerships with a handful of credit unions and sometimes questioning the sustainability and value of the arrangements.
It is in this context that the Financial Inclusion Centre has been working closely over the last year with Affinity Sutton Group. As one of the largest and leading housing associations operating in over 100 local authority areas, they were keen to assess the different options for a more sustainable and productive approach that can deliver benefit to all their residents.
The changes brought about by last January’s Legislative Reform Order could be utilised to implement a new approach to working with credit unions that ensures that every resident is able and encouraged to access the same high quality service, no matter where they live.
We have undertaken comprehensive evaluation work that has analysed the most suitable options forworking with credit unions together with detailed research to determine the potential partnership arrangements, range of products to meet resident’s needs, service delivery methods and investment options. It has involved consultation with other housing associations, within the credit union sector (including several credit unions) and internally with staff and residents.
It has determined that the current arrangements are not sustainable nor in the long-term interests of all their residents nor the organisations. Instead it is looking to pursue national approaches to credit union delivery. This would involve the selection of a single credit union that can deliver holistic, universal, consistent and comprehensive services to all our residents. The benefits of such an approach are seen as:
- Allowing the strongest and most appropriate credit union to be selected against the key financial needs of residents.
- Providing the ability to offer a universal range of financial products delivered remotely by telephone and online, as well as through their existing service infrastructure.
- Enabling every resident to open a transactional bank account for benefit receipt and rent payments.
- Ensuring standardised quality and level of service across the associations.
- Focusing all resources and efforts on promoting a single service thus maximising uptake and increasing innovation and collaborative opportunities.
- Enable monitoring of the number of residents benefiting from the credit union services and measurement of impact.
- Being simpler for staff to understand, promote and refer and could effectively link with internal processes and procedures.
- Not presenting undue barriers to access or usage as the majority of leading credit unions already have the infrastructure and delivery mechanisms required to deliver remotely
- Allowing residents the choice of still joining their local credit union for convenience or face-to-face access, where local partnership are effective.
Affinity Sutton Group has now determined their specific requirements of a national partnership, their criteria and what investment is needed. FIC has lead the production of the tender documentation and look forward to working with them through the selection and implementation process to identify the most suitable credit union with the capacity and capability to deliver on a national scale.
More details of Affinity Sutton Groups ‘1Credit Union’ Project and details of the Invitation to Tender can be found www.affinitysutton.com