Earlier in the year I wrote about the Summer of 2016 being a period that future generations would study in their history lessons. As events have continued to unfold during the Autumn, it continues to feel that we really are living through history in the making…
The outcome of the US Presidential election was another shock to both the establishment and the pollsters. Now, with further national elections in Europe next year, from France, Germany and the Netherlands to Albania, Liechtenstein and Slovenia, there may well be further upsets, including swings towards change, populism and potentially more extreme politics. From a sector perspective it is tempting to ask, ‘so what?’ We are predominantly UK domestic focused businesses with very limited reliance on international markets. We hardly trade outside the UK and are pretty well insulated from what is going on in other countries and markets. But, when we stop to ponder, we know that we cannot ignore the huge geopolitical turbulence that surrounds us.
In the simplest sense, we realise that our traditional focus on strong risk management has gained new dimension – we need to be thinking far harder about uncertainty management We talk a lot about the long term nature of building societies, the inter-generational nature of the business, our social heritage and roots. But, particularly in the current climate, what do we mean by long term? How far ahead do we look when we think about the future outlook for our individual societies and for the building society movement as a whole.
When I joined the BSA three years ago, the big strategic question that we set out to address was, “what do we want the UK’s financial services sector to look like in twenty years ‘time, and what are the steps that we need to take now to have the best chance of achieving that outcome, rather than some other version of the future? “We have made some real positive progress across the whole sector in these three years, consistently taking market share in the mortgage market; constantly striving to provide a decent deal for savers relative tithe rest of the market; strengthening the governance and management of our individual businesses; building capital and dealing with the absolute barrage of new legislation and regulation. This includes some of the biggest changes we have ever seen to the way were required to do business in the form of the Strengthening Accountability in Banking Regime.
At the BSA we have achieved a greater recognition among politicians, officials and regulators of the fundamental importance of a truly diverse financial services sector, both from the point of view of competition and choice for consumers and in terms of the structural resilience of the financial system. In these turbulent times it is tempting to close in a bit, pull down the storm shutters, hold off on the investment programmes and lose the confidence to continue pushing our businesses forward on the path of long term steady growth. The heightened levels of uncertainty in the World; in the shape of a post-Brexit Referendum economy; in the future of the housing market make long term forward planning a whole lot harder, but arguably more important than ever.
I think that now is the time to move forward with our campaign for the future of the UK’s financial services sector. Time to build on all the progress we have made so far, and start talking more confidently about building societies as a growing, dynamic, forward-looking force for good in financial services. Time to build on our social purpose, looking back to the origins of our individual societies as a source of inspiration for how we develop our businesses today and how we continue to improve people’s lives as we sought to do when we were first founded.
Nationwide Building Society has taken a clear visible lead with its new advertising campaign – the first time we have seen ‘building society’ promoted on national prime time TV for about twenty years. Their slogan, “building society, Nationwide” parallels thinking that we have been developing at the BSA about expressing the sector’s ambition around the phrase “building society: and proud of it”. Right now we live in an era of disillusion with established politics; big business and banking in particular. Our more social capitalism – optimising profits, treating our customers well as members, working genuinely for the good of us local communities – chimes strongly with the times we are living in.
I have long argued that our mutual status is a source of competitive advantage, something that shareholder owned banks cannot replicate. The new Nationwide Building Society campaign reflects this, emphasising the positive distinctiveness of being a building society in a marketplace which Julie Thurlow, CEO of Reading Co-operative Bank in Massachusetts, described to me in the summer as a ‘Sea of Sameness’.
Time for a little Carpe Diem – and of course a very happy Christmas!
Orinigally published in Society Matters, Winter 2016 edition.