The first day of the Building Societies Conference (4 May) included a welcome from BSA Chair & Family Building Society Chief Executive, Mark Bogard, and sessions on digital transformation; Open Banking; diversity and inclusion; green housing and the political landscape, amongst others. A varied and fascinating day! 

Highlights of some of these sessions are below and part 2 will be published on Wednesday 11 May:

Welcome

Mark Bogard, Chair 2021-23, Building Societies Association and Chief Executive, Family Building Society

Mark opened conference by talking about the importance of diversity of thinking and how it can help tackle the dangers of groupthink. He quoted Ricky Gervais, who said ’How arrogant are you to think that you deserve to go through life with no one ever saying anything that you don’t agree with or like’. In his remarks, he challenged attendees to listen to different views, to be prepared to reflect on those different views and their own and in turn consider changing their position on issues.

Mark talked about the importance of this for leaders. The best leaders he had worked for had been interested in different views, even if they did not agree with them.
 

Politics - what's really going on? 

Carole Walker, Journalist and Broadcaster

Carole spoke about the current political landscape, with the 2022 local elections, Partygate and the stories of inappropriate behaviour coming out of Westminster. While both Labour and the Conservatives were downplaying their hopes for the local elections, she had spoken to some Conservatives in traditional Southern heartlands who were worried about the results, but it might be the Liberal Democrats who could benefit in those areas, rather than Labour. She said that in her 20 years of working in the lobby she found it was a minority of people who behaved inappropriately and when asked about when the Prime Minster might change, it was unlikely that the local elections would be a critical moment. Instead the Sue Grey report is still to be published and additional fines from Partygate. In politics it is often the confluence of events that result in an unexpected tipping point.
 

Emerging customer-centric opportunities for outsourcing within the mutual sector

Mark Gilliver, Business Development Director, Target Group

Mark spoke about how the Outsourcing market has seen significant change in recent years, presenting new challenges and opportunities for the sector. There has been a shift from the traditional people based BPO (business process outsourcing) industry to a focus on accessible, digital platforms that will revolutionise customer outcomes.

Mark went on to talk about how clients can now take advantage of thought leadership in the outsourcing space and how there has been a much needed shift in focus - outsourcing can now not only save you money but also help grow your income. One of the key changes has been that outsourcing initiatives that were there to solve clients’ problems are now turning into initiatives to help members/customers of clients.

Mid-long term partnerships are now being offered providing opportunities to invest in the relationship and shared risk mechanisms starting to appear. The benefit of this for the sector is providing a better opportunity for building societies to care for their long term client base but also give new cohorts the ability to engage.

For more information:

Target Group

How building societies can approach digital transformation

Steve Marsland, Senior Sales Executive, Finastra; Mark Ford, Chief Operating Officer, Teachers Building Society; Clive Bowles, Principal Consultant, Fairmont Limited; Chris Little, Commercial Director, Finova; Mary Conner, Industry Principal, Finastra

It is always useful to hear real world experiences from building societies who are transforming their digital footprint, whether that relates to customer facing services; back office solutions that transform processes and take cost and risk out of the business or both. 

So it was especially helpful to hear Mark Ford, the COO of Teacher’s Building Society talk about the journey that the society is on with a consortium of providers made up of Finastra, Finova and Fairmort, linked but all with their specific areas of expertise.

A number of learnings stood out, including:

• The need for and value to be gained from conducting member (and potential member) focus groups in advance of such a project, to assess needs and expectations in relation to savings and mortgages. 
• Clarity on the Society’s strategic goals – in this case how digitalisation helps the society achieve long-term, sustainable growth.
• Advance clarity on what is needed from the chosen delivery platform, taking as read that it is robust of course.
• In this case other core requirements included the ability to deliver flexible integration; a platform capable of keeping up with ever-changing regulatory requirements; and a platform that delivers capabilities which accommodate future proofing.
• For Teachers’ the ability to have a system that offers their members the option to engage with the society via digital or human channels was also essential – people still want the ability to talk to other people!
• Teachers also specifically set out to find suppliers able and willing to work as a collaborative partnership.  So whilst Finastra is their prime contractor the three supplier organisations work as a collaborative partnership.

Along the best practice path of Define/Build and Test, Teacher’s Building Society is about to enter the test phase.

For more information:

Teachers Building Society
Finastra
Finova
Fairmort
 

"Strong and Simple" - proportionality in prudential regulation

Jeremy Palmer, Head of Prudential Policy and Regulation, BSA; Nick Lock, Senior Advisor, Future Framework, UK Deposit Takers Supervision, Prudential Regulation Authority; Dr Jurg de Spindler, Director, Association of the Swiss Regional Banks, Thorsten Reinicke, Adviser, Federal Association of German Cooperative Banks

Jeremy Palmer introduced the session by reiterating the BSA’s strong support of the strong and simple initiative, something we have long campaigned for. Jeremy also noted the value of the European element to the session, giving a useful perspective on the UK position.

The PRA was represented by Nick Lock and his team who provided a high level outline of the proposed framework, contained in the very timely CP (released on 29 April).

Nick began by stating the clear intention of the Strong and Simple initiative - to maintain the resilience of firms that are neither systemically important nor internationally active and the stability of the UK financial services sector while implementing a simplified prudential regulation. The key intention is that it will give firms the opportunity to grow, with a series of steps in complexity of regulation rather than a cliff edge.

Nick went on to inform delegates that the most recent CP seeks to define the size and nature of those firms that will be included as a Simpler-regime Firm, for example a proposed maximum threshold of £15 billion of total assets.

The delegates also heard two European perspectives on the regulation of smaller and less complex firms. Firstly, Dr Jurg de Spindler from the Association of Swiss Regional Banks gave an overview of the banking system in Switzerland.  The 244 Swiss banks (of which the 59 regional banks are most similar to building societies) are distinguished by different business models and in terms of governmental supervision, are split into five categories depending on size and degree of complexity.

Thorsten Reinicke, representing the Federal Association of German Cooperative banks, then spoke about the Co-operative bank network in Germany, comprising of more than 750 firms. The UK Strong and Simple framework could apply to these banks which are increasingly being forced to consolidate due to onerous regulatory requirements, despite historically being very stable. He quoted a German saying ‘hope dies last’ in his wish for the EU to turn away from the Single Rulebook and move towards a similar, more proportionate framework.

For more information:

CP5/22 - The Strong and Simple Framework: a definition of a Simpler-regime firm

A huge thank you to this year’s four Headline Sponsors: DXC Technology, Finastra, Mutual Vision and Target Group and Sponsors: BDO, ieDigital, RSA, Salesforce and Sopra as well as all the exhibitors without whom the conference could not happen.