A review of the strategic landscape for building societies
We're delighted to be a sponsor of a new report from Whitecap Consulting, produced in partnership with the Building Societies Association. The report focuses on the roles of strategy, mutuality, regionality and technology, also looking closely at the mortgage and savings markets. It highlights strong sources of differentiation for the building society sector across these areas.
The research involved a quantitative data analysis of all 43 building societies, interviews with 33 of the building society CEOs, and an online survey which received a total of 134 respondents. The report is now live which can be read here
The report identifies four key themes:
Whilst building societies share in a common heritage and most occupy broadly a similar space in the wider financial services market, there is divergence in respect of purpose, strategic prioritisation and commercial focus. And unlike many shareholder-owned organisations, growth, as defined by asset base, profit or enterprise value, is generally not pursued as an end in its own right.
Mutuality is reflected in the internal governance, purpose-led strategies, operational decisions and the culture of societies, creating the potential for a genuine customer orientated approach. And whilst mutuality itself is not well understood externally by customers, its outcomes are well aligned with the increasing focus on social purpose in society in general.
Regionality is an important feature of the sector, and can be closely linked with mutuality. This is especially for small and
medium sized societies, where a strong commitment to supporting local communities is evident. This is more than CSR, and for many smaller and medium sized societies the strength of loyal savers through the branch network is a strong driver of
As with all organisations today, building societies need to continually evolve digitally and remain relevant to current and potential customers. This is widely acknowledged across the sector and is being addressed as a near-medium term priority by many societies across both broker and savings markets.
The building society sector is served by a wide range of organisations, and is courted by many more, especially in terms of tech and FinTech providers. During the course of this project, we have identified a number of important considerations for organisations seeking to engage with the sector, and we have articulated these as a set of guiding principles:
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