United Nations has declared 2025 as the International Year of Cooperatives (ICY2025) under the theme Cooperatives build a better world.
ICY2025 aims to shine a spotlight on the unique contributions of cooperative enterprises, including financial cooperatives.
IYC2025 will:
Raise public awareness - Highlight the contributions of cooperatives to sustainable development.
Promote growth and development - Strengthen the entrepreneurial ecosystem and establishments for cooperatives.
Advocate for supportive frameworks - Encourage the creation of enabling legal and policy environments for cooperatives globally.
Inspire leadership - Foster purposeful leadership and engage youth in the cooperative movement.
But what exactly are financial cooperatives, and how do they differ from traditional banks?
What is a financial cooperative?
Financial cooperatives – including mutual banks, credit unions, building societies – are financial institutions that are owned and controlled by their customers/members.
Unlike traditional banks, where profits go to external investors, customer-owned financial institutions reinvest profits to benefit their customers and the communities they serve.
As customer-owners, members of financial cooperatives benefit from better services and competitive rates, while also supporting a banking model that invests in their communities.
The history of financial cooperatives in Australia
Financial cooperatives have a long history in Australia, dating back to the 1840s.
When investor-owned banks said no to hard-working people looking to borrow, groups of like-minded workers and communities came together to create credit unions, mutual banks and building societies. From teachers and nurses to police officers, customer-owned banks emerged to serve communities.
Australian Mutual Bank was formed as a result of a 2019 merger between Sydney Credit Union and Endeavour Mutual Bank. Endeavour Mutual Bank can trace its origins back to 1953 with the formation of the Motor Transport Employees Savings & Loans Co-op. Sydney Credit Union was formed in 1963 to provide employees of the City of Sydney Council with an alternative to banks and pay day lenders.
As the original peer-to-peer lenders, Australian Mutual Bank, along with other customer-owned banks continue to be deeply committed to serving their communities.
The cooperative advantage
Customer-owned banks reinvest profits to benefit their customers-owners through market-leading services, competitive rates and community support.
The May 2024 Roy Morgan Customer Satisfaction survey showed COBA members had significantly higher scores than the Big Four – 89.5% for the customer-owned banking sector as a whole, compared to 75.4% for the Big Four banks.
Research also shows that members of customer-owned banks enjoy lower interest rates on home loans and attractive rates on savings accounts.
Deeply rooted in their communities, customer-owned banks actively support local initiatives and charities. In the last financial year, customer-owned banks gave to their communities at a rate nearly nine times higher than the major banks.
Facts and figures (Courtesy of ICA)
- More than 12% of humanity is part of any of the 3 million cooperatives in the world!
- The largest 300 cooperatives and mutuals report a total turnover of 2,409.41 billion USD, according to the World Cooperative Monitor (2023).
- Cooperatives contribute to the sustainable economic growth and stable, quality employment, providing jobs or work opportunities to 280 million people across the globe, in other words, 10% of the world’s employed population.
- The International Cooperative Alliance is one of the largest non-governmental organisations in the world today by the number of people it represents: more than 1 billion cooperative members from any of the 3 million cooperatives worldwide.
Australian Mutual Bank’s impact
As a cooperative, Australian Mutual Bank values its members and puts their interests first, providing quality banking, loan and investment services to the community since 1953. These principles have ensured that our members continue to benefit from an ever changing banking environment whilst being offered the best possible service.
In 2025, we celebrate not only the global achievements of cooperatives but also Australian Mutual Bank’s role in delivering these benefits to our members for over 70 years. Being a cooperative and a B Corp enables us to be part of a bigger community of businesses with similar values and ethics that are shifting the global economy to benefit all people, communities, and the planet.
(Source: Customer Owned Banking Association)
