Building Societies Association
UK first as mutual sector hosts national forum
|
Date:
18 Dec 2008
|
Print page | Email |
Mutual organisations in the financial services sector including building societies, mutual insurers, foundation trusts and cooperatives joined organisations from across the health, education and retail sectors on 4 December in the first national event to bring together organisations owned by members and not shareholders.
The Rt Hon Hazel Blears MP, Secretary of State for Communities, who addressed the Forum, said of the mutual sector:
“Over their long history, mutuals have made a mark on many towns and cities across the UK. Many command a degree of affection and trust that few plcs can. That’s because of the principles at the heart of mutuals: not just speculation, but support; not just profit, but investing in the common good. The [mutuals] "yearbook" reveals just how big a role mutuals play in our economy and society, employing over 800,000 people, with membership equivalent to 1 in 3 people in the UK, revenue of £84bn, and assets of £477bn.
“Like any other business, mutuals are feeling the strain of the financial crisis. But there’s a silver lining. Mutuals are better placed than many plcs to weather the storm. Compare what has happened to the building societies who demutualised and those who didn’t over the past year or so. And at a time when people are feeling insecure, and more aware of the limits of what markets alone can deliver, there’s a new hunger for solidarity. Already co-operative and social banks are seeing more people keen to invest. In a downturn, mutuals can make a huge difference. Less vulnerable to the fluctuations of the market. More locally responsive. And as employers, able to help people who would otherwise be unemployed keep in touch with the world of work.
“So it’s time for mutuals to be ambitious. Shout about your successes. Make sure everyone knows about the "cooperative advantage." And as a Government I promise we will continue to listen and learn, trying to create the right framework to help you grow.”
Adrian Coles, the BSA’s Director-General also addressed the Forum. He focussed on how building societies’ philosophy of doing business had developed since the fashion for demutualisation ran out of steam at the end of the 1990s. He said: “The years since then have seen all of the demutualised businesses lose their independence, while some of them have failed. In contrast, building societies have built a robust business model based on delivering long term value to customers (through higher savings rates and lower mortgage rates), community engagement, retention of branches, a more consumer-based culture, better levels of service, and member engagement.”
Adrian presented a wide range of market research data showing how stark the differences were between consumer perceptions of service in banks and building societies.
Adrian completed his presentation by addressing some of the challenges building societies would face in the cold recessionary environment of 2009 – a growth of arrears, for example, and the difficulties of attracting savings in a very low interest rate environment. Nevertheless, the current situation contained lots of opportunities for mutuals; in particular their remoteness from “The City” and the fact that they are trusted, simple, straight-forward and democratic attuned perfectly with the current public mood.
