"We have to tell the world why we’re different to banks in a way that resonates with customers," says Dick Jenkins, Chief Executive of the
Bath Building Society.
"Mutuality is a good model, but I doubt that in 20 years we will have convinced the public about mutuality unless we can make it tangible for them."
The
Building Societies Association(
BSA) recently polled its chief executives about the future of mutuals, and the role of government in regulating and encouraging their growth. All were positive about the future, but for MPs there are also important messages.
The
BSAwas established in 1869, and the long history of its members' business model was one advantage over the banks that was raised by Graham Beale, Chief Executive of the
Nationwide Building Society.
"We must continue to stand up for what we believe in championing those issues that will deliver better outcomes for our customers," he says.
James Bawa, Chief Executive of the
Teachers Building Society,argues that while the majority of building societies are not as big as Nationwide, and therefore cannot challenge the bigger banks on size, "we do offer something different".
"Recently, at the Teachers, we discovered that our members were getting frustrated when they called us and ended up using the automated dialling system," he explains.
"As a result we scrapped this feature altogether, so now when customers phone, they can talk to a person immediately, resulting in better service, satisfaction and customer outcomes.”
The
BSArepresents mutual lenders and deposit takers in the UK including all 45 UK building societies.
Mutual lenders and deposit takers have total assets of over £330bn and, together with their subsidiaries, hold residential mortgages of over £230bn, 18% of the total outstanding in the UK.
They hold over £230bn of retail deposits, accounting for 19% of all such deposits in the UK. Mutual deposit takers account for over 30% of cash ISA balances. They employ approximately 39,000 full and part-time staff and operate through approximately 1,600 branches.
Chris White, Chief Executive of the
Hinckley & Rugby Building Society, identifies "apathy" at Westminster as an obstacle to continued growth.
"There has been little concrete support for the building society sector despite positive sound bites," he says.
"The advertising power of the multinational global banks is huge and banks that have been tarnished in many ways have been able to offset this by relentless advertising that suggests that they are not wolves in sheep’s clothing - but have they really changed their spots?"
White says the government must "continue with the agenda that will see the ring fencing of the retail banks to protect us all from 'too big to fail', while at the same time ensuring competition and diversity in the market – this might mean positive discrimination for smaller financial institutions".
Nationwide Building Societyis "embracing the digital future of financial services", says Beale.
"The pace of change is remarkable. Different age groups are switching to digital at different speeds and for different services, and we must ensure that we are providing a full range of services for all our members to meet their different needs."
David Marlow, Chief Executive of the
Nottingham Building Society, agrees that new technology can help counter "the cynicism and mistrust that currently exists for most consumers"
For Amyn Fazal, Chief Executive of the
Penrith Building Society, mutuals "should stick to what they do best".
"Our staff work in a great place - we don’t make widgets, we are really close to people’s hopes and fears.
"We can try to help our customers find the best accounts for their mortgages and savings, look after them all through their relationships with us, so we become the natural place for them to return to.
"We should try even harder to promote the benefits of membership, deliver great value and attractive products with impeccable integrity and fun. We should celebrate the uniqueness of our brand and ethos and continue working together not to challenge the banks but to become the go to place for individual savings and mortgages so that the banks feel that they have to challenge us."
With the political parties already engaged in putting together their manifestos ahead of the 2015 general election, the nation's building societies demonstrate that ‘community action’ and even the maligned 'Big Society' are alive and well in Britain, and need to be nourished and supported.