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Building Societies Conference 2023 round up: Day one

We take a look back at the first day of the Building Societies Conference 2023 in Liverpool.

Chair's Welcome 

Mark Bogard, Building Societies Association Chair 2021-2023 & Chief Executive, Family Building Society

Mark Bogard, BSA Chair* and Chief Executive of the Family Building Society, opened the 2023 Building Societies Conference by talking about the importance of cognitive diversity. Thinking differently is as important as what we think about and decide to do. But this is incredibly challenging in a world where there has never been so much to know and we find ourselves in a constant state of change. Mark referenced ‘Factfulness’ by Hans Rosling, which has helpful tips to develop cognitive diversity. People defer to their worldview when making decisions which often results in poor or inaccurate decisions, He also pointed out that the sessions during conference would provide an opportunity to learn from experts and practitioners and help develop our knowledge to help make better decisions. He used the conference polling system to highlight that what people think they know isn’t always true.

Mark also thanked the headline sponsors (LendInvest, Mutual Vision, Protiviti, Pexa, Quadient and Sopra Banking Software) and the conference’s other sponsors (BDO; ieDigital; Sopra Steria and Target Group) for their support in making the event a success.

*Mark's tenure as BSA Chair ended on Thursday 4 May. Rob Pheasey is the current BSA Chair.
 

Keynote: The beauty of simplicity in a complex world

Robin Fieth, Chief Executive, Building Societies Association

Robin was next to take to the floor to speak to delegates about the beauty of the simplicity of the mutual sector’s social purpose in an increasingly complex world. Social purpose has been the consistent backbone of our sector since the first known building society was founded in a pub in Birmingham back in 1755.

Robin highlighted how, despite an ever changing world, building societies and credit unions continue to work to maximise member value, not shareholder value, as they always have done. Through the lens of this simpler model, he explored some of the complexities that all financial services firms, including customer-owner mutuals, are living with today, namely; the economic backdrop, the focus on Unicorns and Gazelles over steady growth, the aftermath of SVB and Credit Suisse, the digital pound, the growth of AI and personal financial resilience and the need to ensure that no one is left behind.

Robin also touched on Basel 3.1, telling the audience: As far as is possible, the UK’s prudential framework should support our housing market and our individual and collective dreams of home ownership. Not undermine the market by pushing up capital requirements unnecessarily, and with that the cost and potentially availability of mortgages. It should also be promoting competition and diversity in the banking sector, not constraining competition by penalising domestic mono-line mortgage lenders.”

You can read Robin’s speech in full here
 

Keynote: How do you build your future? 

Sacha Ramanovitch - Fair4All Finance

Following the Chair’s welcome and Robin Fieth’s Keynote speech, in the final presentation of the opening session Sacha Romanovitch took us back to our roots with a reminder of how and why building societies exist and how we had evolved to meet the changing needs of society, whilst remaining true to our founding purpose.

She highlighted the realities that people face today – with 17.5 million people financially vulnerable and the proportion of homeowners in younger age groups declining – and considered how the sector can help those in today’s challenging circumstances.

She explored some options to get the audience thinking about who they serve, who they don’t serve … yet, and what stepping stones they could provide to make it possible for the vulnerable to take a step on the housing ladder or to start a savings habit.

Her challenge to the audience was to consider partnerships and collaborations to find solutions, to create a future that they would be proud to pass on to their children.

You can find out more about the work of Fair4All Finance here

 

Decarbonising housing in the UK: driving greater consumer action

Phillippa Cardno, Chief Executive, Newbury Building Society (Chair)

Gareth Griffiths, Chief Executive, Ecology Building Society; Richard Merrett, Director of Strategic Relationships, SimplyBiz Mortgages Ltd; Tilly Necar, Head of Green Finance and Minimum EE Standards for Privately Owned Homes, Department for Energy Security and Net Zero; Paul Broadhead, Head of Mortgage & Housing Policy, Building Societies Association

Phillippa Cardno opened the session by highlighting the scale of the issue – UK residential housing is responsible for almost 20% of carbon emissions - and the current lack of information available to consumers to help them make the best decisions on retrofitting their homes. Phillippa pointed out that new homes are built to a higher energy efficiency standard than existing housing stock, and that the focus should be on the huge task of decarbonising homes.

The panel then shared their views on green finance and decarbonisation:

Gareth Griffiths talked about the Ecology Building Society’s ‘fabric-first’ approach, supporting different types of constructions and materials in homes and the need to look at actual energy use in homes. He highlighted how recent studies show that EPCs have no correlation to energy efficiency and usage and how we need to stop associating EPC with green. Gareth then spoke of the need to look at your own business impact as a first step, and the positives of working in a hugely collaborative industry when trying to address the big issues, calling for a sector-wide commitment on improving housing stock. He also called on government to introduce a proper standard on how we as a country are going to decarbonise homes.

Paul Broadhead outlined the green finance market, from about 4 products in 2019 to over 50 today. Lenders are beginning to engage to support borrowers buy more energy efficient homes or bring their homes up to standard. Paul pointed out that the majority of the available products reward borrowers in homes with higher EPCs and that the take up of products offering cashbacks to improve EPC rating is currently low and how this makes innovation difficult. However, Paul did highlight a number of lenders that are innovating in this space – Skipton, Leeds and Ecology Building Societies for example. He also spoke about the work the BSA is doing with the GFI on place based pilots – expecting the launch of a Green mortgage pilot in Manchester in June. Paul highlighted how many people may be waiting to see whether Government will help financially so clarity in this area is key to action.

Richard Merrett gave the brokers’ perspective: what has happened so far is not enough but we have to start somewhere. Richard believes that brokers need to change the narrative with their customers, focus more on what the customer can do to achieve some quick wins and save some money. Once those are achieved then the conversation could change to borrowing to do the bigger things – small steps leading to bigger steps. Richard also talked about the need to engage with the broker community.

Tilly Necar agreed with the rest of panel that the energy leaky properties need the most innovation in terms of green finance. She confirmed that the results of the Green Accelerator programme bids will be published soon and there will be a response to the Improving Energy Performance through Lenders consultation by the end of this year. Tilly spoke about the blockers holding back consumer action being many and varied therefore requiring a range of interventions. She also said that Government is looking to increase consumer access to advice.

Suggestions from the panellists for policy changes that could make the most difference included making retrofitting costs tax deductible, making available cheaper funding to enable banks and building societies to offer cheaper finance to consumers and a rebate on stamp duty for retrofit.

Ultimately, we need carrots, not sticks, and it is essential that no one is left behind.


The future of partnerships and ecosystems

Mike Fisher, Chief Production Officer - Mutual Vision Technologies Ltd; Richard Wainwright, Chair Executive Officer, Mutual Vision Technologies Ltd; Will Carroll, Chief Executive Officer, Monmouthshire Building Society; Nick Lawler, Sales Director UK&I, Mambu

Richard Wainwright, Chief Executive Officer, Mutual Vision, spoke about the evolution of core banking systems - from monolithic core systems to digital ecosystems to cloud banking engines. He highlighted Mutual Vision’s strategic partnership with Mambu to offer the sector an opportunity to bring different platforms and apps together, which would provide members with a better service.

The panel discussion focused on the benefits of the partnership, with Mambu stitching together platforms and apps to provide institutions with a range of options to choose from (including a current account facility). 
 

Enhancing member experience in branches with AI

Sadie Qureshi, Manager, Protiviti; Karen Smith, Managing Director, Protiviti; ​Thomas Lemon, UK Country Market Lead, Protiviti

In this afternoon session Global Business Consulting firm, Protiviti, talked about the importance of using data and AI to deliver the branch experience you’d want for your members.

The overall member experience is based on the customer’s perception of the service they receive, such as the friendliness of the adviser, service efficiency and product relevance, with positive experiences leading to long-term relationships.

Bringing technology into the branch operation should start with a clear strategy on what you want to deliver to your members and the experience you want them to have. Using data, which must be accurate and well-maintained, machine learning can then help to streamline processes. Data will also help to understand your customer, who they are, what they do, and what they potentially need. By monitoring every customer touch point, technology can remove friction and delays, and ultimately build deeper, stronger and longer-lasting relationships. 

The final thought we were left to consider, was that whilst there is much we can do to use technology to improve our customers’ experience, the demographic of members is changing, necessitating the need to evolve our strategies to meet the demand of our future members.

 

The round-up from Day two will be published later this week.