Hello everyone, and thanks for joining me again. As many of you know, I’ve recently changed jobs and am now leading marketing for a UK building society. It’s an exciting move, and I’ll be using this blog as a space to also share what I’m learning, thinking about, focusing on the unique and fascinating UK building society sector, along with the regular topics I post about.
Now, for those of you who aren’t familiar with them, you might be asking: what exactly is a building society?
Simply put, a UK building society is a financial institution that’s owned by its members. Unlike a commercial bank, which is owned by external shareholders, our members are the people who have a savings account or a mortgage with us. This fundamental difference in ownership shapes our entire purpose. Instead of just chasing profits to pay dividends, our main goal is to look after the best interests of our members.
Purpose and History
The core of a building society is to help people buy homes and provide a safe place to save. They’ve been doing this for a long time. The history of building societies goes all the way back to the late 18th century, when groups of people would literally pool their savings together to help each other build houses. The idea was simple: when enough money was saved, one person would get a loan to build a home. Once everyone had a home, the group would dissolve.
This model evolved into the “permanent societies” we know today, which stay open indefinitely, constantly welcoming new members. While we’ve expanded our services, our core structure remains the same:
- Member Ownership: If you have a savings or mortgage account with us, you’re a member.
- One Member, One Vote: No matter how much money you have, every member gets one vote at our Annual General Meeting. It’s a truly democratic model, giving members a real say in how the society is run.
- No External Shareholders: Because we don’t have outside shareholders to please, we can reinvest our profits to offer better interest rates on savings and lower rates on mortgages.
This mutual model isn’t just a British thing. Similar institutions, like credit unions in the US and cooperative banks across Europe, and across Asia, share the same core principle of being member-owned. They might have different names and slightly different rules, but their purpose is the same: to put members before profits.
The Digital Challenge: Why It’s Not Just About Members
In a world where digital-first banks and agile fintechs are everywhere, building societies face a serious challenge. While we still hold a huge portion of the nation’s savings and mortgages (asset base of £648.3 billion) and have a great high-street presence (30% of all high street branches), our digital experience often lags behind.
Recent research highlights a clear gap between what members expect and what is often delivered. A study by Moneyhub found that nearly half of building society members reported difficulties engaging with services, with the digital experience being a frequent pain point. Furthermore, for younger generations (aged 18-34), an easy-to-use mobile app is the second-most important factor when choosing a financial provider.
Almost half of building society members have reported difficulties with digital services, and for younger generations, a top-notch mobile app and a good digital experience is a deal-breaker. But it’s more than just a direct-to-member problem. We also have to consider our crucial partners:
- Intermediaries and Brokers: If a broker finds our online portal clunky or slow, they’re more likely to take their business to a competitor. We need to make their lives easier, not harder.
- Our Own Branches: Our branch teams are our brand ambassadors. When they’re bogged down with outdated systems, it takes time away from what they do best: providing personalised, human-centric service.
The pressure to modernise is real. And it’s particularly tough for smaller societies that don’t have the multi-billion-pound budgets of the big players like Nationwide. How can a smaller society with limited resources develop an app that competes with a Starling or a Monzo? How can we attract top tech talent away from big-city Fintechs? These are the questions keeping many of us up at night.
Technology: Our Secret Weapon
Here’s the thing: technology is not the enemy. It’s our best friend when it comes to preserving our mutual values. It’s about using technology to free up our people to do what they do best—provide brilliant, human-centred service.
1. Data & Personalisation: Thanks to things like Open Banking, we have access to a huge amount of data (with member consent, of course!). This allows us to move away from generic communications and offer truly personalised advice and products. For example, we can analyse a member’s spending to suggest a savings plan that actually works for their lifestyle. It’s about being a genuine partner, not just another bank.
2. AI & Automation: I know our branch staff and our intermediary teams are our greatest assets. They provide the personal service that defines us. But what if they could spend less time on paperwork and more time building relationships? That’s what AI can do. By automating tasks like mortgage underwriting or reporting, we can free up our people to have more meaningful conversations. This is how we can deliver a level of service that no automated bank can match.
As a marketer in this sector, seeing these ideas in practice makes all the difference. AI and automation are no longer just for the back office; they’re becoming essential tools for us, too. They can help us be more effective in several ways:
- Smarter Content Creation: AI can help us brainstorm blog post ideas, write social media captions, or even draft the first version of an email campaign. This frees up my team to focus on the strategic side of things.
- Hyper-Personalised Campaigns: This is where AI truly shines for a building society. Instead of just segmenting our members by age or postcode, we can use AI to analyse their data to create a genuinely hyper-personalisedcampaign. We could automatically send a potential first-time buyer a tailored email with tips on saving for a deposit, or offer a loyal saver a new interest rate before they even think about looking elsewhere.
- Faster Performance Analysis: Running a marketing campaign used to involve a huge amount of manual data crunching. Now, AI-powered tools can analyse campaign performance in real-time, telling us which ads are working and which aren’t. We can then adjust our spending and messaging on the fly, ensuring every pound we spend on marketing is working as hard as possible.
A New Era of Scale
The UK building society sector is already demonstrating a powerful understanding of how to use scale to invest in technology. The recent acquisitions of Virgin Money by Nationwide Building Society and The Co-operative Bank by Coventry Building Society are excellent examples.
These mergers are not simply about increasing market share; they are about creating the scale and capital needed to invest in digital platforms, modernise legacy systems, and compete with large retail banks on their own terms. By growing their asset base, these societies are able to fund the significant technological transformation required to attract and retain the next generation of members. They are proving that mutuality and modernisation can thrive together.
The ‘So What?’
So, what does this all mean for us?
Ultimately, the choice isn’t between tradition and technology. It’s between smart, strategic evolution and gradually becoming irrelevant. The future of our brand and our business depends on embracing this challenge head-on.
We can’t outspend the big banks, but we can definitely outsmart them. The true ‘so what’ is that our core values of trust, community, and personal service are more important than ever. We just need to use the right tools to make sure our brand is as relevant to a young first-time buyer as it is to our most loyal savers. Our digital future isn’t about becoming a big bank; it’s about becoming a better building society for everyone.
Ready to discuss? I’d love to hear your thoughts on this, or what you’d like me to deep-dive into next. Let me know in the comments or drop me a note!
MN
Finovation 