Over the last couple of years, a growing number of societies have started to develop mobile phone apps for existing customers, with Yorkshire, Principality and Newcastle all launching apps in 2020.
The apps have complemented the face to face services that building societies already offer existing customers and Newcastle recently spoke through the development of its app at the BSA’s Digital Mutual conference.
A number of societies are now looking to see how they can onboard new customers directly via their apps and the first to offer this type of access to customers was Tipton and Coseley Building Society last month. Its app onboards new customers with full ID and verification.
Tipton’s operations director Sally Morgan spoke to the BSA to talk through why now is the right time to launch the app, partnering with technology firms, launching a new national distribution channel for savings and the future of branches.
For Tipton, the app leapfrogs a generation of technology as the society does not have an existing internet banking proposition.
But behind the scenes Tipton has been digitising its back-office processes over the last 4 years.
It was the opportunity to drive change around the building society ethos that was one of the main attractions for Morgan in the role at Tipton when she arrived at the society in 2016.
Prior to that, she had worked in a variety of senior roles at Nationwide Building Society and Coventry Building Society. During her 15 years at Nationwide, she headed up its insurance, banking & savings and communications and her four years at Coventry were focused on managing its operations and call centres.
She then took on interim roles including international travelling between London and Cape Town, before the role at Tipton came up and the opportunity to use her skills to innovate at the society.
The first thing she overhauled was the society’s mortgage processes, which were digitised and made paperless in 2017.
“From when the case comes in from the broker to when the money goes out the door, it’s paperless,” she says.
These efficiencies have transformed how it processes mortgages internally and there was a similar desire to use technology to transform how it engages with savings customers.
It’s all about the apps
Tipton has 4 branches in the West Midlands and they are a key part of how it engages with customers. Like the majority of building societies, it provides customers with passbooks, which have a loyal following from customers.
“We have instances of customers coming to us from the high street and opening accounts because we have passbooks and that’s what they want,” she says.
That regional, mutual focus is a core part of what the Tipton is as an organisation, but with its mortgage business national, it wanted a new distribution channel to engage digitally with savings customers nationally as well as locally.
“It’s really important to us that we remain relevant to new and existing customers,” she says.
“To continue to be relevant you’ve got to offer more than a branch distribution channel. So the key was finding something that did that.”
Launching an app complemented its corporate strategy for growth - to keep growing its mortgage book, it requires more savings, and it has already begun to add customers and deposits via this new distribution channel.
“We asked ourselves what customers, including younger customers, use today - it’s all about the apps. To us it was a bit of a no brainer that we needed to find a partner to work with and do an app development.”
The IT marriage
Tipton has partnered with the UK fintech Consectus to provide the technology for the app, which meshes with Tipton’s existing systems.
“We had all the customer journey skills, they had all the technology and technical skills, so it was a good partnership.”
Morgan and her team at Tipton have meticulously designed the customer journey to ensure it is an easy and painless process, stripping the app down to the minimum to enable the customer to open an account.
“There’s no USP in savings, so it’s all about easy to do business with us,” she says. “And that for me is the most fundamental thing, even above a good rate. Because, if you can make it easy, then someone is more likely to join and stay with you.”
The app has also had operational benefits internally; the account opening, ID and movement of funds is all automated, it has taken away the potential for errors, improved account opening times and fundamentally made things more efficient.
“It enables us to grow our business in size and volume without exponentially having to increase our headcount,” she says.
The app was launched with an account that became a best-buy savings rate on the day of launch and had to contend with a large volume of customers looking to access the app on day one.
Despite this, the app had a 97% success rate in terms of customers passing automated ID and verification.
“We were very careful in designing and thoroughly testing the electronic ID. We have made it as simple and direct as possible to meet all of the regulations. It’s the bit that customers dislike so you want to make that part of the journey as smooth as possible.”
An Omni-channel future
In terms of next steps, Tipton has a number of ideas about how it can develop the distribution channel in terms of product offering. Another area is ensuring there is good integration between its two distribution channels - the branch and the app.
“We are not omni-channel yet - you can’t go into the branch and finish opening the account on the app,” she says.
“There will be a point where you will want someone to be able to start in one channel and finish in another. That’s where we’d like to be in the future - but not yet.”