A new global report from the World Council of Credit Unions (WOCCU) offers new insights on the customer-owned sector, which now caters to more than 412 million people around the world.
The report notes mergers and consolidation remain a major trend amid a growing global credit union movement, while regulatory reform further shapes the sector’s trajectory.
In this article, Dr. Brad Pragnell, Head of Strategy at COBA, breaks down some of the key takeaways from the data, including what a continued trend of consolidation means for the customer-owned banking sector in Australia, and the role credit unions can continue to play in the financial landscape.
Crunching the numbers
Touted as WOCCU’s most comprehensive statistical report to date, the latest report reveals there are now 67,137 credit unions around the world as of 31 December, 2024, spanning 101 countries.
Despite a slowdown in membership growth, credit unions continue to serve nearly 412.7 million members globally, representing some 5 per cent of the global population and 12 per cent of the global labour force. Membership numbers are up slightly from 411 million back in 2023 and 404 million in 2022.
Asset growth has also continued, albeit at a slower pace. Total assets crossed AUD$5.8 trillion in 2024, compared to AUD$5.5 trillion in 2023 and AUD$5 trillion in 2022. This upward trend, according to WOCCU, “reflects continued confidence in the cooperative model and its long-term stability”.
For Pragnell, an interesting observation from the data remains the sheer size of Australia’s customer-owned banking sector, solidifying Australia as an important player on the international stage despite being a relatively small population country.
Australia has 53 customer-owned banks, serving 5.4 million members and collectively holding AUD$187 billion in assets.
On average, a credit union globally has about 6,000 members and AUD$86.1 million in assets.
“I think what’s always interesting is that when you do some of the math, you realize how large the customer-owned banks are in Australia,” he says.
“One of the things that I come away with [from the data] is that actually, our customer-owned banks are quite large compared to their international counterparts, both in terms of their customer base and in terms of their asset base.”
More broadly, too, there’s been considerable growth taking place in developing markets in recent years. Countries like India, Brazil, the Philippines, Mexico, Ethiopia, Nepal, Kenya, and South Korea now stand among the top ten largest credit union systems globally, alongside the United States and Canada.
“Credit unions aren’t evenly distributed, but the sector has market share on every continent, and you see a lot of jurisdictions where there’s been significant growth in recent years. The diversity is quite compelling, and the role they play in terms of providing financial inclusion and uplift, and creating credit markets where they don’t historically exist, is quite fascinating,” Pragnell observes.
Contending with regulatory reform
Regulatory reform, member and asset growth, and digital transformation are among the top ranked strategic priorities for credit unions according to WOCCU’s latest report, followed by institutional capacity, youth relevance, and financial inclusion.
Interestingly, regulation is also flagged among the top areas of risk by global cooperatives, along with credit, technology, economic environment, fraud and cyber security, and capital adequacy.
Reflecting on these insights, Pragnell notes that regulation has been pretty demanding for the banking sector in the last two decades, from both local regulators and international bodies like the Basel Committee on Banking Supervision and Financial Action Task Force (FATF). It can be an additional challenge for credit unions, given their size and more narrow business activities in comparison to many other financial institutions.
“Particularly since the Global Financial Crisis in 2007-2008, we’ve seen a significant tightening by regulators in terms of trying to prevent future financial crises.
“But I think we’re starting to get to the end of that cycle,” Pragnell explains.
This year, the Council of Financial Regulators’ Review into small and medium-sized banks acknowledged there has been an increase in banking regulation over the past decade, bringing with it a surge in costs related to capital, reporting, and compliance.
“It does provide some hope that policy makers and regulators will genuinely embrace this concept of proportional regulation, that they adapt or modify regulations based on the actual risks that are being faced and try avoiding a one-size-fits-all approach,” Pragnell says.
Ultimately, it’s a delicate balancing act from policymakers.
“They have to be challenging themselves and questioning whether they’ve caught the balance right in terms of ensuring safety and stability versus trying to promote competition and innovation. Finding that balance can be quite challenging and they have to realize that the market is adapting and evolving all the time,” Pragnell remarks.
Continued consolidation activity
As highlighted by many keen observers of the sector, a persistent trend over the last few years have been mergers and acquisitions, with the number of credit unions around the world now dipping to less than 70,000 for the first time since 2016.
Consolidation pressures are increasing, WOCCU notes in its report, as the sector continues to grapple with regulatory compliance, operational efficiencies, digital transformation, and other issues of scale.
It’s a trend that’s echoed in Australia as well.
Amid such consolidation and growth, continuing to maintain close ties with customers and local communities remains an ongoing consideration across jurisdictions around the world.
“How do you keep your heart? How do you maintain that purpose, that connectivity, that embeddedness within the community that you’re serving when you become this larger, more complex organisation? I think that’s a big challenge, because you don’t want to be just another bank. Yes, you are providing banking services, but you want to maintain that differentiation as a customer-owned bank,” Pragnell observes.
The crucial role played by credit unions
This month also saw the sector celebrate International Credit Union Day, which highlights the spirit of the global mutual movement, and has been commemorated on the third Thursday of October since 1948.
The theme for 2025 was “Cooperation for a Prosperous World”, and Pragnell notes credit unions continue to hold a crucial spot in the financial landscape for a variety of reasons.
“They often address unmet needs or needs that aren’t met by larger, mainstream banks or financial institutions, and there always will be people in the community or groups that are excluded or have challenges in accessing financial services. So, customer-owned banks often have a role to play in providing appropriate services for them,” he explains.
“Mutual banks and credit unions also provide an alternative in terms of people wanting to bank with purpose, and in terms of providing competition to major banks.”
Additionally, he observes customer-owned banks are particularly well-positioned to drive innovation in the broader sector, as they can benefit from collaboration and the ability to stay nimble by virtue of size.
It’s a sentiment echoed in WOCCU’s report, which observes that while membership growth has tempered after years of expansion, credit unions are poised to “expand inclusion through renewed purpose and innovation”.
“One of the things that credit unions have done quite well over many years is to collaborate with each other to solve problems. That gets challenging in a more competitive environment where competition regulators are not necessarily enamoured with collaboration between competitors, and some of the old forms of collaboration might not necessarily be fit for purpose, but I think that essence of mutuality and collaboration remains an important differentiation for our sector,” Pragnell explains.
The smaller size of credit unions, in comparison to larger players, means they can stay flexible and responsive to spur advancements.
He adds: “They can experiment with new things, and I think that they will continue to provide that wellspring of innovation going forward.”