Fortnightly financial five minutes #28 Robin Fieth

Please tell us about what the BSA does and more about your role there.

The Building Societies Association (BSA) champions and supports all 42 UK building societies and seven larger credit unions. BSA member firms serve over 26 million customer-members and employ around 51,500 people. Building societies have assets of £500 billion, including residential mortgages of £370 billion, 23% of the total outstanding in the UK. They hold over £362 billion of retail deposits, an overall 19% market share, with 41% of all cash ISA balances.

Building societies and credit unions are mutual businesses, owned by and run for the benefit of the generations of individual savers and borrowers who are their members.  This mutual structure, fundamentally different from that of shareholder-owned businesses, enables a truly long-term, inter-generational focus, driving the strategy, behaviour and culture of BSA member firms.

My role as CEO of the BSA is primarily about building and maintaining strong relationships with stakeholders from government, parliament, regulators, UK and international partners such as Co-operatives UK, the European Association of Cooperative Banks (EACB) and a growing number of specialists, such as fintech organisations.

Our members are independent firms, each with its own distinctive strategy, products and services.  My job is about influencing, persuading, informing and challenging. Our mission is to do everything we can to ensure that financial mutuals are at the heart of the future of UK financial services.

One of the BSA’s aims is to make sure building societies can best serve their customers. What are some of the ways you do this?

The culture, behaviour and decisions made by building societies are different because of their customer ownership business model. They can be truly purpose-driven, for the benefit of their members, their communities and UK society as a whole. Building societies are able to take a consistently long-term view, which can be reflected in rates, prices and products, leading to increased consumer choice and product innovation.

For example:

• In the 12 months to March 2023 building societies paid their savers £1.5 billion more in savings interest than if they had paid the average rates offered by the largest banks.
• Building societies are also more likely to provide mortgages to people with complex needs such as self and custom builders, the self-employed and older people.
• On the high street, many building society savers greatly value their branches, which is why they have a proven track record of being much more likely than banks to keep their branches open. In 2011 building societies accounted for 14% of the branch network across the country, by 2021 this had risen to 22%.
• Results from a recent YouGov survey showed that 89% of building society customers said their society provides good customer service (compared to 82% of bank customers), and 88% think their society treats them fairly as a customer (compared to 79% of bank customers).

I’m sure there must have been quite a few changes in the way building societies are used by consumers today, compared to 20 years ago. Which changes have you found the most interesting?

It’s almost 250 years since the first building society was established, and the fact that the sector is flourishing today demonstrates its ability to adapt to changing customer, economic and market conditions. In the digital age our sector is going for the best of both worlds: keeping a tight hold of our traditional values and our community presence, while recognising that digital services are essential.

There are still millions of building society members who value the personal face-to-face service provided by their local high street branches. We have therefore seen a lot of societies invest in the re-development of their branches and the back-end systems that support them. 

Alongside this, we have seen a huge digital investment by societies in online transactions, mobile apps, cloud, APIs, process automation, data management and regulatory reporting. And whilst the majority of building societies do not offer current accounts and day-to-day payments, we have also seen some societies using Open Banking to help boost their members' access to cash. These new technologies have enabled societies to deliver new products and enhance the service they provide to their members.

What further changes do you see developing over the next few years?

AI and other new technologies are developing rapidly. Building societies will continue to listen to their customer-members, and led by their requirements, will use technology where appropriate to enhance the personalised customer experience their members expect.

But digital is not the way for everyone. Humans still want and need to interact directly with other humans. A key differentiator of building societies is that they can, and do, take a personal approach to doing business, such as manual underwriting to serve those with more complex needs. So, while investing in digital capabilities, building societies will continue to maintain more traditional services that many of their members value and trust. We will see technology going hand-in-hand with the personal touch that customers appreciate.

And on a personal note, if £10 000 landed in your lap tomorrow, how would you spend it?

There’s a question. Tempting as it might be to buy a very expensive new bike, it would probably be wasted on my mediocre ability as a cyclist.  But a really nice family holiday with our grown-up children would rank up there.

Thanks very much Robin, really useful to hear more about the evolving building society sector.

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The content of any discussions shouldn't be taken as an indication of future FSCS policy positions. The views expressed by guests are their own and don't reflect the views of FSCS.