Australia’s credit unions are rapidly disappearing as they lose customers and income to the banks.
But instead of closing, many are rebranding as banks in a bid to claw back customers, according to research by Finder.com.au.
One in eight credit unions closed or rebranded in the past year, and the number of building societies fell by a whopping 37 per cent.
Finder money expert Bessie Hassan said one of the key reasons was that younger people don’t really understand what credit unions are.
She said people hear the word `credit’ and think of credit cards, while `union’ has become more controversial since it was originally used to evoke the cooperative spirit of organised labour.
“So for young people, these words strung together don’t make much sense,” Ms Hassan told AAP. “If no one knows what you do, it will be hard to attract new business.
Using the word `bank’ is more simple for customers and younger generations.”
One of the notable name switches was the Greater Building Society, which in May changed its name to the Greater Bank.
The Queensland Police Credit Union will also change its name to QBANK on July 1.
However, Ms Hassan said changing names didn’t change the structure of credit unions, which are owned by the customers, compared to banks owned by shareholders.
“Historically, credit unions were set up to help workers access banking services and products without incurring high rates and fees associated with banks,” she said. “It’s always best to do your research to find the best deal for your personal circumstances.”