HISTORIC PRESS RELEASE : Tackling Financial Exclusion – Building Societies have a Role to Play [November 1998]

The press release issued by HM Treasury on 12 November 1998.

Building societies were today challenged to contribute their ideas to tackling financial exclusion in our most deprived  neighbourhoods by the Economic Secretary, Patricia Hewitt.

Speaking at the Building Societies Association Annual Lunch the Minister pointed out that there were between 2.5 and 3.5 million people, concentrated in the most deprived neighbourhoods, without a bank or building society account. The main reason being that people did not think that traditional bank our building society facilities were suitable for them. The Minister said:

“The big challenge for banks and building societies is to redesign the products on offer to better suit the circumstances and preferences of those currently without access to them.

“One important step forward is the availability of the new accounts where on-line debit cards replace cheque books and access to credit is withheld until both the customer and the institution feel comfortable with it.

“The creation of these new accounts signals the industry’s growing awareness of profitable banking opportunities among these sections of the community.”

The Minister said that building societies have shown a tradition in community involvement. She said:

“Based on your principle of mutuality and tradition of community involvement, building societies have a vital contribution to make to tackling financial exclusion. Many  of you are already involved – indeed most of you carry the name of your community, and many support local activities too.

“Combined with your expertise in financial services, you are ideally placed to be at the heart of this initiative. So I would like to challenge you to contribute your own ideas to tackling financial exclusion – to think hard and imaginatively about how financial services might be available to all in our society.”

The Minister also urged building societies to think about how they could help credit unions. She said:

“I urge all building societies to think about how you can help credit unions, not out of a sense of duty to those worse off than yourself, but because it will give people the opportunity, currently denied to them, to become valued members of your society.

“So, by playing your part now you will help to build new customers for the future. We are not talking about charity, but about developing a market which in every sense of the word will be mutually beneficial to all concerned.”