Co-operative banks have developed from humble origins to become significant players in the European financial services industry.

Recognisable as national champions in their own markets, as a sector these organisations comprise a diverse set of financial services institutions, ranging from domestic retail focussed players to large multi national universal banks. Today almost one in five European citizens transact with a co-operative bank, through a network of 4,500 banks and 60,000 branches.

The co-operative model was originally focussed on combating financial exclusion in industrialising economies, and in particular for the rural poor where commercial banks lacked the information to allow them to lend safely. The co-operative model carries unique features that are inherent to its member ownership and that lead to benefits and challenges that are neither widely recognised nor understood.

Purpose of the report

The four objectives of this report are to:

1. Provide an overview of the current state of co-operative banking in Europe
2. Offer insights into the issues faced by co-operative banks
3. Discuss the purpose of co-operative banks and how they deliver on this
4. Describe the future challenges facing co-operative banks

Oliver Wyman has created this report on a pro bono basis. We work with commercial and co-operative banks alike, and view ourselves as objective analysts of the co-operative sector. A preponderance of academic and commercial literature seeks to understand which of the co-operative or commercial banks represents the “winning” model. Here, we take a pragmatic view, noting that in most European countries, the models co-exist and that neither shows much inclination to convert to the other model. Our approach is therefore to take the co-operative model as a given, and to focus on its inherent features as a basis for defining a core purpose and future agenda for these banks.

Download Co-operative Bank: Customer Champion

PDF format, 784KB, 47Pages. Published by Oliver Wyman.

Foreword

We would like to thank Oliver Wyman for the interest taken in the European co-operative banking sector. This report contributes to a better understanding of the co-operative banks’ business model which is a real asset for citizens and SMEs in Europe. Co-operative banking represents a significant, and in some countries, majority part of the banking industry. As such it is critical to consumers and businesses.

With the recent shift in market conditions and the return of volatility, we believe that the co-operative model – as a distinct way to run a bank – creates a pluralist and more stable system, and is more vital than ever. Even though the conditions which led to the formation of co-operative banks in the 19th century have changed, our banks still remain, at the beginning of the 21st century, frontrunners.

We welcome this timely analysis that visits the past by looking at the future opportunities and possible evolutions for our sector.

Dr Christopher
EACB President

Pleister Hervé Guider
EACB General Manager

About Oliver Wyman:

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