Customers are increasingly expecting their financial services providers to treat them as unique individuals, offering them services that are matched exactly to their own personal circumstances. Against such a backdrop, embracing data analytics is essential for the future of banking. It enables institutions to stay competitive, enhance customer experiences, and manage risk more effectively in
Author: Kevin Phillips, Director of Solution Engineering
Working with digital banking clients on both sides of the Atlantic, I’ve had the unique opportunity to observe the remarkable similarities between US credit unions and UK building societies. Although they operate under different regulatory frameworks and financial landscapes, their shared mission and operational principles have remained steadfast for over a century.
Both institutions were originally established to help individuals save, invest, and borrow money within their means. Unlike traditional banks, which prioritize shareholder profits, these organizations are member-owned, fostering a strong sense of community and trust. Below, I outline three key similarities that continue to define their success today:
1. Shared Purpose
US credit unions and UK building societies were created to provide responsible lending to those in need while promoting financial well-being for both savers and borrowers. Their origins lie in serving local individuals who were historically unable to access mainstream banking services due to a lack of financial assets or land ownership.
In the US, credit unions emerged as a way for community members to pool their savings, enabling affordable lending within the group. Similarly, UK building societies provided working-class individuals with a safe place to grow their savings and a path to homeownership through accessible mortgage lending.
Today, these institutions continue to offer secure savings options and affordable lending rates while playing an active role in supporting local communities through development initiatives and charitable contributions. Their mission remains rooted in financial empowerment and community engagement.
2. Member Ownership
Unlike traditional banks, where profits are distributed to shareholders, credit unions and building societies are owned by their members—individuals who invest their savings. These institutions operate as not-for-profit entities, reinvesting earnings to benefit their members rather than external investors.
Depositors earn interest on their savings, while borrowers—who primarily seek mortgages in the UK’s building society model—access loans under strict affordability guidelines and at competitive rates. This member-centric ownership structure not only enhances financial security but also strengthens the community-focused ethos that defines these organizations.
Beyond financial transactions, credit unions and building societies foster a sense of collective responsibility. They are more than just financial service providers; they are integral parts of the communities they serve, reinforcing local economic stability and social well-being.
3. Personalized Member Relationships
A defining characteristic of both US credit unions and UK building societies is their commitment to personalized service. Unlike many large financial institutions that prioritize efficiency over customer interaction, these organizations have built their reputations on fostering strong, long-term relationships with their members.
Historically, both institutions have prioritized face-to-face interactions, with physical branches serving as community hubs where members can build relationships with staff who understand their unique financial needs. This human connection has been a cornerstone of their success.
As digital banking becomes increasingly prevalent, credit unions and building societies are embracing technology while striving to maintain their personal touch. Although the shift to online and mobile banking presents challenges in preserving traditional customer engagement, advancements in AI and machine learning offer new opportunities to enhance personalization. By leveraging these technologies, these institutions can create tailored digital experiences that replicate—and even surpass—the level of service provided in physical branches.
Looking Ahead: The Future of Member-Centric Financial Services
The continued success of US credit unions and UK building societies will depend on their ability to blend traditional, community-based relationships with innovative digital banking solutions. As newer generations favor digital interactions, delivering relevant, personalized, and engaging content will be key to maintaining their unique value proposition in an evolving financial landscape.
By staying true to their founding principles while embracing technological advancements, these institutions can continue to serve their members with the same dedication and integrity that have defined them for more than a century.
