Cooperation Meets Innovation: How Credit Unions Are Going Digital

What if financial services were built to include everyone, not just the few?

In this episode of the Sense of Identity podcast, we sit down with CEO Mark McAlpine and Head of Proposition & Innovation Kerry Nicolaides.

Together at Not The Odd One Out, Mark and Kerry are helping mutuals, credit unions, and cooperatives modernise through shared services, collaborative strategy, and inclusive innovation.

Their goal? To make financial services fairer, more accessible, and digitally capable - without losing sight of the communities they serve.

Championing Financial Inclusion in a Digital Age

Mark and Kerry’s mission begins with a clear purpose: levelling the financial playing field.

That means helping institutions that are often overlooked - credit unions, mutuals, building societies - access tools, tech, and strategies previously reserved for the big players.

Credit unions in the UK make up less than 3% of the financial sector’s market share.

Yet they serve millions and are deeply embedded in their communities.

They’re certainly not new actors on the scene - UK credit unions date back to the mid-1900s, while friendly societies trace their roots to the 1600s.

The difference today is that these member-owned organisations are now facing serious pressure to digitally transform.

But as Kerry points out, they’re not short on motivation.

"They want to do so much for their members or customers and they don’t have access to the technology they need to do that."

Kerry Nicolaides, Not The Odd One Out

This tension - deep commitment to purpose but limited digital capacity - is what sparked their current work.

CU Share: A Cooperative for Cooperatives

One of the standout efforts from Mark and Kerry is something called CU Share.

It’s the UK’s first shared services platform created specifically for credit unions.

Why does this matter? Because credit unions can’t always afford digital transformation on their own.

By pooling budgets, sharing tools, and communicating across organisations, they can build sustainable, scalable solutions.

CU Share helps them do exactly that. In essence, it’s a cooperative of cooperatives - a structure that fits their DNA.

The Barriers to Transformation

Why don’t more credit unions already offer seamless digital services like mobile apps or instant member onboarding?

Mark outlines three major blockers:

• Legacy systems - Old infrastructure is costly to maintain and hard to build around.
• Lack of automation - Many processes are manual, slowing down operations and member service.
• Limited access to integration - Smaller credit unions can’t easily plug in new fintech capabilities due to vendor inflexibility or prioritisation issues.

Interestingly, many of these challenges mirror what larger banks experience too.

The difference is scale and budget.

"Mainstream providers won’t build a £150K integration when they’re chasing £15M contracts," says Mark.

New Tech, Old Constraints

There’s hope on the horizon though.

Open banking, cloud technology, and microservices are unlocking new possibilities.

Credit unions can now layer services, automate processes, and improve user experiences without fully replacing core systems - at least in the short term.

But eventually, real transformation will require shedding the old tech.

Crucially, shared innovation models like CU Share mean that no organisation has to go it alone.

Workplace Partnerships and Payroll Integration

Another secret weapon for credit unions? Workplace relationships.

Kerry explains that many institutions are already embedded within specific industries or employers - from nurses to armed forces to transport employees.

These relationships are a powerful route to member growth and new proposition design.

Mark also highlights an opportunity: payroll deductions.

Just like auto-enrolment for pensions, automatic savings schemes linked to payroll could transform financial resilience - especially for underserved workers.

Technology can now support this ambition.

Financial Products Must Evolve with People’s Lives

It’s not just about systems - it’s about people.

Mark is passionate about reaching the hundreds of thousands who don't fit “mainstream” credit profiles.

That includes those with low savings needs, irregular or insecure incomes, and those excluded from typical lending products.

These people often pay a premium - or worse, fall victim to exploitative lenders.

That’s where credit unions make a real impact.

Kerry points out that building for these groups needs the right mindset:

"They’re not always able to be the masters of their own destiny. Being further down the priority chain makes innovation hard. We want to change that."

Kerry Nicolaides, Not The Odd One Out

The Road Ahead: Tech, Trust, and Simplicity

Credit unions are starting to look like a digital movement for good.

Mark compares the vision to neobanks like Monzo or Revolut - but with a vital difference.

Instead of shareholder profits, everything is reinvested back into the community.

But that future depends on stronger collaboration and the right support services.

Not The Odd One Out is stepping into that space, helping organisations modernise while maintaining their values.

It’s a message that resonates in busy boardrooms and across local communities alike.

"Nobody should be left behind. Financial services should be fair, accessible, affordable - especially for those with fewer financial choices."

Mark McAlpine, Not The Odd One Out

FAQs

What Is a Credit Union?

A credit union is a member-owned, not-for-profit financial co-operative that provides savings, loans, and other services to its members, often with a community or employer focus.

Why Are Credit Unions Important for Financial Inclusion?

They reach underserved and vulnerable people who may be excluded by mainstream banks, offering fair credit options and flexible financial solutions.

What Is CU Share?

CU Share is a shared services organisation launched to help UK credit unions pool resources, share technology, and scale innovation affordably.

Are Credit Unions Regulated Like Banks?

Yes. They are fully regulated and must follow strict rules around capital, risk, and governance, just like mainstream financial institutions.

Can Smaller Financial Institutions Really Compete Digitally?

Thanks to modular systems, open banking, and shared service models, smaller players can now offer the same digital experience as neobanks - without needing big budgets.

References

Financial Inclusion Overview, World Bank, accessed 2025

Unlocking Financial Inclusion, Center for Strategic & International Studies (CSIS), 2025

Mutual Societies Registration Function: 2024/25, Financial Conduct Authority (FCA), 2025

Mutuals Eye Growth Through Mortgage Innovation and Improved Technology, Mortgage Solutions (BSA), 2025

More People Have Bank Accounts but One in Ten Have No Cash Savings, FCA Survey Reveals, Financial Conduct Authority (FCA), 2025

What Financial Inclusion Looks Like in the UK, RELX, 2024

Why Did Credit Unions Come Into Existence?, 1st University Credit Union, accessed 2025

Top 6 Legacy System Modernization Trends in 2025, Tkxel, 2025

The UK FinTech Sector Continues to Make a Positive Impact, Innovate Finance, 2024

2024 Financial Services Outlook, Deloitte, 2024

Digital Transformation in Financial Services: Leaders' Insights, ValueBlue, 2025

Employees Want Payroll Savings and Flexible Pay, Zellis, 2025

10 Shared Services Trends Shaping the GBS Industry in 2025, Auxis, 2025

What We Cover | Check Your Money Is Protected, Financial Services Compensation Scheme (FSCS), accessed 2025

Digital Banking Maturity Study 2024, Deloitte, 2025

Reviewed by

Sam Kendall, 04.06.2025