The World Council of Credit Unions (WOCCU) says credit unions and financial cooperatives worldwide still face challenges in reaching out to unserved markets and vulnerable populations.
In its 2023 Global Regulatory Update, WOCCU notes that the payments landscape continues to evolve rapidly with the emergence of new fintechs, technologies and regulatory challenges. These, together with digitization, cybersecurity and a myriad technological changes also represent hurdles to the credit union cooperative model.
Regulation is also listed as a key concern by WOCCU, which reports that these continue to impose large regulatory burdens for credit unions and often acts as a barrier to account opening and access to correspondent banks.
The WOCCU Global Update warns that significant changes are occurring in the payments area with potential disruptive effects on credit unions. Ensuring affordable access on a level playing field, so that credit unions can provide services to their members, will therefore be key.
WOCCU said that 2023 promises to be another difficult year for credit unions. The global organization puts significant emphasis on threats posed by cyber incidents with cybersecurity high on the list of priorities for regulators worldwide as a risk to financial institutions.
Both the frequency of and sophistication of cyber-attacks are growing, and the pressure of increasing and improving cybersecurity is growing. At the same time, the cyber threat landscape is continually changing and expanding amid rapid digital transformation.
Cybersecurity continues to be a priority for many regulators, representing a systemic risk for all financial institutions. International standard setters are working on standards and other information-sharing tactics to strengthen the financial sector.
Foreseeably, WOCCU says that there will be additional regulations that will alter how credit unions are addressing cybersecurity concerns. “International standard setters are beginning to understand the critical role that credit unions play in providing responsible and affordable financial services. This is a key driver for inclusive and resilient growth around the world,” says Mr Andrew Price, World Council Senior VP of Advocacy and General Counsel.
Mr Price says shaping the regulatory frameworks that help maximize this potential will allow credit unions to be the catalyst for rebuilding coming out of the Covid-19 slowdown and throughout an anticipated global recession.
The World Council’s Global Regulatory Update is put out on an annual basis to help credit unions and financial cooperatives prepare for the compliance issues most likely to impact them in the year ahead. The new edition also covers several other leading regulatory issues affecting credit unions across the globe.