In a challenging financial landscape, Cardiff and Vale Credit Union (CVCU) continues to prioritise its members’ wellbeing by embracing the Consumer Duty (CD). We explored how CVCU has integrated CD into their operations, ensuring that fairness, accessibility, and support are at the forefront of their approach. Here's how CVCU is making customer-centricity the foundation of their mission.

Interviewer: Can you give me some background of CVCU and how it has embraced the CD?

Cardiff and Vale Credit Union (CVCU) is a small but dedicated team of 14 staff members, supported by a volunteer board. We proudly manage over 10,000 customers and provide loans ranging from £100 to £15,000. Our members primarily consist of individuals who are financially excluded—many of whom are on benefits or facing significant financial challenges.

In recent years, particularly after COVID-19 and the ensuing cost-of-Living crisis, we’ve noticed a growing number of our members struggling to meet basic needs. Many have been turning to us for loans to cover essentials such as school uniforms or to consolidate debt. The impact of rising living costs has been huge, with some members unable to afford even basic necessities like heating.

This is where the Consumer Duty (CD) comes into play. CD aligns perfectly with our core purpose, which is to prioritise the welfare of our consumers. We’ve always been committed to ensuring that our products and services are fair, particularly for those who are either vulnerable, or financially and digitally excluded. Our mission is to provide support that doesn’t take advantage of the underprivileged, and CD strengthens that commitment.

We design our lending practices to be fair and considerate of our members' financial situations. We carefully assess their ability to repay loans, ensuring that we don’t exacerbate their financial difficulties. Ultimately, our goal is to offer products that help, rather than hinder, our members, providing them with the resources they need to navigate these challenging times.

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Interviewer: How has CVCU Embedded the Consumer Duty?

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What’s interesting about CVCU - given the demographics of our members - is our approach to treating all customers with the same care and caution as if they were in vulnerable circumstances, even if they don’t explicitly identify as such. We ensure that all members receive equal attention and support, especially when it comes to understanding loans and credit. We pair our services with education to ensure members fully grasp what credit means, even if we cannot assist them directly or if they choose to seek other options in the future. Our Consumer Duty subgroup, chaired by the Consumer Duty Board Champion, provides additional monthly reports on implementation progress.

We have also taken steps to partner with various organisations. Two of which are worth mentioning are:

• Recite Me: We've partnered with Recite Me, an accessibility tool that allows members to translate our website, adjust readability settings, and have content read aloud. This is critical for members who face language or accessibility barriers, allowing them to fully understand our services. This tool's data also informs our reporting to the FCA and helps us tailor our services to better meet the needs of our diverse membership.

• Welsh Water: We collaborate with Welsh Water, a non-profit, to engage with vulnerable members through their robust support program. This partnership included training for our staff and board on how to handle vulnerabilities. When members face payment difficulties, we refer them to Welsh Water, which offers programs to manage arrears. We also reschedule loans to more manageable terms or refer members to other organisations for further assistance.

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Interviewer: How have you innovated with the CD?

We introduced a new software platform and app to better identify vulnerable customers and manage underpayments - a significant undertaking for our small team. This simplifies access and transactions for our members, enhancing their overall customer experience and journeys.

To elaborate further, we realised that our previous platform created a cumbersome customer journey. Members faced difficulties accessing necessary resources and connecting with us through the online platform. To tackle this issue, we partnered with a new software company to develop a more robust website and app. Our goal was to simplify and enhance the user experience, allowing members to manage their finances more effectively. Now, they can pay bills, apply for loans, or send messages at any time—whether it’s during the day or in the middle of the night.

Interviewer: How does this new platform contribute to a better customer experience?

The new platform significantly improves accessibility. Members can now easily access the resources they need at every step of their journey. Beyond just simplifying transactions, the software provides us with advanced data capabilities that help us identify and understand vulnerable customers more effectively. For instance, it generates monthly reports that detail the reasons for vulnerability, such as job loss, while also acknowledging that situations can change rapidly. This data is crucial for us to build a clearer picture of vulnerability, allowing us to tailor our services and support accordingly. This approach ensures that our services are not only accessible but also aligned with each member’s unique circumstances. .

Interviewer: What other improvements have been made as part of this digital transformation?

We’ve also implemented several other key updates. We now refund overcharges and offer competitive loan products, including loans under £1,000 for those who are struggling financially. Additionally, we've updated our templates to enhance simplicity and transparency. Our Board has fostered a culture of faith and empathy, focusing on straightforward communication and promoting financial well-being among our members.

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Interviewer: With regards to the four outcomes how has CVCU embrace of the CD and innovation help?

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At CVCU, our commitment to Consumer Duty (CD) and innovation is at the forefront of everything we do. Here's how we’re making a tangible impact on our members' lives across four key outcomes:

1. Product Innovation

We’ve launched a new software platform that helps identify members underpaying their loans, which can negatively affect their credit scores. To address this, we proactively intervened and introduced a free mobile app designed to support members facing digital poverty. This initiative ensures that all our members have the tools they need to manage their finances effectively.

2. Enhanced Support

Understanding that 36% of our members were vulnerable and in need of an interest freeze, we took swift action. We launched a dedicated Financial Wellbeing section on our website and provided regular updates through social media. Additionally, our team completed 13 training sessions focused on key aspects of Consumer Duty, ensuring that we’re fully equipped to support our members’ needs.

3. Fair Pricing and Value

In our commitment to fairness, we refunded £651.85 in overcharges resulting from a software migration. We also continue to offer competitive loan products, including options under £1,000, specifically designed for members facing financial difficulties. Our goal is to ensure that every member receives the best value possible.

4. Clearer Understanding and Communication

We’ve revamped our website to make navigation and language simpler and more user-friendly. Over 70 communication templates were updated to ensure transparency and clarity. Our board has cultivated a culture of good faith and empathy, focusing on straightforward communication and robust financial wellbeing support.

5. Evidence of Impact

Our efforts are already yielding significant results:

• Membership Growth: Since the website relaunch, 1,366 new members have joined CVCU.
• Digital Engagement: 2,856 members have registered for web/app access, with 94.3% of loan applications now submitted online.
• Improved Communication: We’ve simplified 70 communication templates.
• Corrective Measures: Adjusted 205 overcharged loans to reflect accurate amounts.
• Support for Vulnerable Members: Identified and assisted 36% of members in need of an interest freeze.
• Efficiency: Loan decision times have improved by 40%.
• Competitive Analysis: We continue to offer loans under £1,000.
• Training: Conducted 13 staff training sessions on Consumer Duty.

CVCU’s dedication to Consumer Duty and innovation is not just about compliance; it’s about ensuring our members’ financial wellbeing. We are committed to continuous improvement, and these initiatives reflect our ongoing efforts to meet and exceed our members’ expectations.

Interviewer: What are your plans for the next two years concerning the implementation and development of the Consumer Duty?

At CVCU, our commitment to Consumer Duty (CD) doesn’t stop at the present—we’re constantly looking ahead to better serve our members and the wider community. Here’s a glimpse into our future to enhance our support and expand our impact.

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1. Customer Segmentation

Understanding the diversity of our community is crucial. We plan to implement dynamic translation features on our website and mobile app to cater to Cardiff’s multicultural population. This will ensure that all our members, regardless of language, can easily access and understand the resources and services we offer.

2. Customer Mapping

We’re deepening our efforts to understand and support vulnerability among our members. By delving into who we currently serve and identifying who we can better serve, we aim to put a face to each member, recognizing their unique challenges and needs. This initiative will help us better understand the many facets of vulnerability and tailor our support accordingly.

3. Expanded Digital Presence

To reach more members and provide even better guidance, we’re increasing our social media presence and developing case studies. These real-life examples will showcase how members can achieve their financial goals with the right support, offering inspiration and practical advice to others in similar situations.

4. Community Work

Our partnerships, like the one with Welsh Water, are vital to our mission. We plan to continue and expand these collaborations, with a focus on vulnerability and financial wellbeing. By working together with other organisations, we can provide even more comprehensive support to those in need.

5. Product Range and Monitoring

We’re committed to expanding our product offerings and enhancing our monitoring processes. Through surveys and advanced tools, we’ll gather feedback to continually improve customer outcomes. Our goal is to serve not only vulnerable and financially excluded members but also those with more consumer choices. By broadening our product range, we aim to demonstrate that CVCU is an ethical choice that benefits the entire community. Supporting us means supporting others, and we’re excited to expand our offerings to cater to everyone.

These future plans underscore our dedication to upholding Consumer Duty principles while continuing to innovate and grow. At CVCU, we believe that by better understanding and serving our members, we can create a stronger, more inclusive community for all.

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Interviewer: To close this segment of - what would be your proudest achievement?

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Getting this initiative off the ground initially seemed impossible for our small team. However, through dedication and effort, we’re proud to have come to where we are today.  

Consumer Duty has put a spotlight on the team’s commitment to providing the best outcomes for our members. Although we still have far to go, we will continue to put the needs of others at the heart of what we do.