Following a two-year break due to the pandemic, it was a pleasure to return to the Building Societies Annual Conference on behalf of Unblu last month, this time taking place in Liverpool. As an exhibitor at the event, we were glad for the opportunity to meet representatives from building societies and other mutual financial institutions and discuss the current landscape and challenges around member experience.
Organised by the Building Societies Association, the event also provided a vibrant forum for conversations about the themes that are pertinent to building societies and their members. In the UK market, this is a sizeable sector; mutual financial service providers serve 25 million customers nationwide and collectively manage £477 billion in assets. Situated within a financial climate afflicted with a cost of living crisis, it was a timely moment to bring the industry together and hear what the experts had to say about working towards greater financial inclusion.
We had the privilege of hearing from some distinguished figures in the building societies space, with a welcome delivered by Building Societies Association Chair Mark Bogard. The event curated presentations from a vast range of standpoints, including but not limited to business directors, tech executives, senior building society professionals, financial journalists and academics.
Such a range of expertise was valuable for mapping out the forces shaping building societies and mutual financial services today—but five take-home messages stood out to me in particular.
The cost of living crisis
Throughout the many discussions taking place at this year’s BSA conference, there was a clear thread focusing on the cost of living crisis facing many people in the UK today. This implies a particular duty for the building society sector—which focuses less on profit than its retail banking counterparts—to do the right thing with borrowers and savers alike. In the context of rising interest rates, serving members’ best interests promises to make a huge difference for many consumers.
To put the current rate of inflation into perspective, some of the more memorable statements pointed to a 90% increase in the average weekly food shop and a 70% increase in fuel and gas, which is having a direct impact on many households. As it was noted, the inevitable consequence of this will see people struggling to repay mortgages. For building societies and other mutual financial services institutions, circumstances like this will demand that the ethos of community care is respected and prioritised. The objective must be to support those in vulnerable financial scenarios and ensure their homes are not repossessed.
Diversity & Inclusion
The question of what it means to be diverse and inclusive in a mutual financial services firm was key to many discussions at the event. Katharine Birbalsingh CBE, Chair of the Social Mobility Commission, gave an enlightening keynote address on the topic during the conference’s first day, and there were calls from other panellists to redress the gender gap on building society boards.
On an encouraging note, we also heard of some successes around gender parity in the sector. The FCA’s Sheldon Mills drew our attention to a group of studies that suggest a higher number of women on an executive board tends to result in improved company performance, notably when it comes to managing risks. Such an insight served as a valuable reminder that diversity and inclusion are not only an ethical standard for today’s financial organisations, but a strategic advantage too.
Environment & Sustainability
The past year has seen climate matters come to the fore. Amid the backdrop of COP 26 in Glasgow and the PRA’s new climate-related supervisory expectations, many financial institutions are beginning to embed sustainable practices. It was fascinating to hear from strategists at a range of building societies, who shared how they are responding to the climate challenge and developing ESG competencies in each of their firms. On an industry level, there was also mention of how the mutual sector might be in a unique position to contribute to the UN’s net-zero 2050 target.
The FCA's new consumer duty proposals came up on several occasions. In relation to the potential impacts for firms, BSA CEO Robin Fieth specifically said that there is now a clear obligation to make customer communications "clear and timely". But as he also pointed out, there is a way to see this obligation as an opportunity—one that fosters trust between building societies and their members.
What’s more, the FCA’s new proposals seem to reflect the understanding that every customer has a set of individual needs. For that, personalised advice is key. This might mean leveraging the appropriate member data to bring more value to interactions, or finding ways to personalise communication channels.
From an Unblu perspective, the implications of the FCA’s new proposals are a certainly familiar idea. In fact, enabling transparent digital communication between financial institutions and customers is a core objective of the Unblu platform. We’ve seen time and time again how the right channels and communication tools can better equip members or banking customers in their financial health, and ultimately help financial institutions do right by their consumer duties.
The issue of innovation and digital transformation was certainly present at the event, but it wasn’t front and centre in any keynote presentation. There was, however, more than one comment that tech vendors occupied around 95% of the exhibition space. Given the current status quo of digital member preferences, this was only to be expected.
In my own view, this seemed to mark a shift in the standing of digital innovation among building societies: from an industry trend to an accepted sector truth. Far from being less important, the abundance of digital and tech in the exhibition hall (and lack thereof among keynote speakers) reflected a group consensus: that all building societies should be looking to digital channels to serve their members better.
Shaping the future of mutual finance
We’d like to thank the Building Societies Association for putting together a fascinating agenda of speakers, presentations and exhibitors. It was a wonderful opportunity to reconnect with the heart of the sector and tune into some fresh perspectives for the future of mutual financial services. We look forward to continuing in that direction at our upcoming UK events!
Unblu & Building Societies
Unblu helps building societies have efficient, convenient and ongoing digital conversations with members. As the preferred engagement and collaboration platform of over 160 financial institutions worldwide, Unblu delivers meaningful, secure and compliant interactions by using digital tools that surpass member expectations.