Liquidity under pressure: How UK credit unions can take back financial control

For years, liquidity was the quiet pillar of credit union stability - a metric reviewed, not felt.

But the calm has shifted.

Operating margins are thinning. Depositor behaviour is changing. Lending appetite is under watch.

When balance sheets tighten, liquidity risk stops being a technical discussion and becomes a leadership test.

Loans to members in UK credit unions reached a record £2.62 billion as of mid-2025, highlighting how balance-sheet activity and demand dynamics are evolving under rising costs and liquidity pressures.

Across the sector, cost-to-income ratios averaged ~74% in FY24 (according to Central Bank of Ireland reporting), forcing boards to make harder, faster decisions with less room for error.

What was once a financial management exercise is now an organisational one - exposing how clearly objectives, ownership, and accountability are defined across every credit union.

The turning point: from management to mastery

The credit unions now leading through uncertainty share one mindset: control is not about reaction, it is about rhythm.

Drova's Financial Resilience Playbook for credit unions sets out five fiscal steps that turn pressure into performance: set clear objectives, define measurable metrics, execute through owned initiatives, embed risk and compliance into daily operations, and report strategically with real-time visibility. Objective-led GRC starts with what the business is trying to achieve - and connects every risk, control, and action to that goal.

When liquidity, arrears, and lending controls are connected to measurable targets, boards move from monitoring outcomes to controlling performance.

This is where financial resilience stops being a defensive act and becomes a proactive system. It is the difference between surviving market pressure, and using it to strengthen performance discipline.

Three mindset shifts for financial leaders

1. Precision over reaction

Liquidity pressure is not solved by more reporting cycles or additional dashboards. It is solved by connecting every decision to a live objective. When every goal - from liquidity ratio to arrears recovery - is visible and owned, leadership moves from hindsight to foresight.

2. Ownership over oversight

Assigning accountability does not just distribute responsibility - it builds rhythm. When ownership is clear, decisions become faster, and confidence becomes collective. That is how boards steady operations, even under liquidity strain.

3. Performance over protection

Financial resilience is not about playing safe. It is about turning control into competitive advantage.

Credit unions that connect liquidity visibility with strategic decision-making create space to lend smarter, serve better, and operate stronger.

Visibility is the new value driver

In today's environment, confidence is a by-product of clarity. When leadership teams can see - in a single unified view - how liquidity links to arrears, lending performance, and member activity, margin stability stops being luck and starts being leadership.

The ability to see and act on this connection is what defines modern resilience. Resilience is measurable when visibility meets accountability.

From pressure to performance

Financial pressure is unavoidable. But how boards respond determines whether that pressure becomes chaos or control.

Drova's Financial Resilience Playbook gives credit unions a clear framework to convert strain into structure:

• Map objectives directly to financial and operational controls.
• Assign ownership without adding new systems or silos.
• Build confidence through measurable liquidity and arrears insight.

With the PRA sharpening its focus on liquidity stress testing and governance oversight, credit unions that embed this level of clarity are not only compliant - they are confident.

The outcome?

You do not just manage liquidity - you run it.

Take back financial control

Liquidity risk will continue to test credit unions. But those who treat it not as a reporting burden, but as a leadership discipline, will stay ahead - more stable, more accountable, and more capable of growth.

Financial control is not about watching numbers; it is about connecting purpose, people, and performance - and turning governance into confidence.