Businesses up and down the country have had plenty of reaction to the announcements made by the Chancellor in her maiden Budget. Perhaps the biggest reaction from business has been to the raising of employers’ national insurance contributions, and to the changing of the thresholds when contributions begin.

We’ve heard already from the likes of Marks & Spencer, Sainsburys and BT, who estimate the measure will cost each of them £100 million or more. For Tesco, that figure is closer to £1 billion. Whether it’s increasing automation, moving operations overseas or scaling back on new hires and promotions, businesses are all weighing up steps to combat the hit to their bottom line. 

With 51,500 employees working on either a full-time or part-time basis, building societies in the UK certainly don’t escape this either.  So what options are available to building societies and to wider banks, lenders and other networks?

Go for growth

Perhaps the most obvious way to combat a hit to the bottom line is to grow top line revenue. What does this mean for building societies? It means innovation – creating products and services that not only encourage people to save their money with you, but loans and mortgage products that answer clear demands in the market from borrowers. 

Across the mortgage market, lenders of all flavours have regularly shown fantastic innovation in product and criteria to help overcome affordability challenges and to support buyers. While this has often helped keep the wheels of the market moving in lieu of government support, it now takes on an even bigger role as margins are squeezed. 

It’s likely we could see building societies and other lenders exploring the right partners and integrations to venture into new product offerings. At the same time, we could also see many businesses looking at the customer experience and their current systems to deliver a far better service. 

Drive efficiencies

Another important response for businesses is to look at their processes and their overall productivity and assess whether there is an opportunity to improve efficiencies. Without realising it, the changes made in the budget could actually be the biggest call to action for firms to really get to grips with digital transformation. 

Rather than outdated legacy systems, mutuals have the opportunity to embrace new technology and greater collaboration to not just meet the expectations of members, but make decisions faster, service assets more efficiently and deliver a far greater service. With increasing competition from banks, non-bank lenders and from challenger brands, the ability to stay relevant is hugely important and certainly reliant on tech adoption. 

Outsource

Finally, we have to be conscious of where our competencies lie as a business and identify opportunities outside this to outsource to specialists. As a result, businesses across financial services continue to harness the power of business process outsourcing (BPO). This enables them to hand off key functions to experienced third-parties who have greater knowledge and capabilities to deliver real efficiencies and a clear competitive advantage. A good example is in mortgage originations and loan servicing, but also for the likes of compliance, customer care and service. 

With the focus back on their core functions and services, business such as building societies can streamline their operations, free up vital resources, all while reducing important costs. In such a complex sector as this though, it is important that firms select the right partner - one that has the right expertise, experience and importantly, technology to execute these tasks correctly and efficiently. 

The Budget has certainly created an interesting landscape for businesses to navigate in the pursuit of greater funding for our important public services. Rather than burying our heads in the sand though, it’s arguably a great opportunity for us to take stock of where our businesses stand now and how we can improve to overcome these obstacles and ultimately, deliver a far better service.