Building Societies Conference 2023 round up: Day Two, Part Two

The afternoon session of the final day of the Conference involved Keynotes from Debbie Crosbie, CEO, Nationwide Building Society and Andrew Wishart, Senior Property Economist, Capital Economics together with breakout sessions on Diversity & Inclusion, Digitising the home buying process, levelling up regional strategies and digital transformation.

The afternoon session of the final day of the Conference involved Keynotes from Debbie Crosbie, CEO, Nationwide Building Society and Andrew Wishart, Senior Property Economist, Capital Economics together with breakout sessions on Diversity & Inclusion, Digitising the home buying process, levelling up regional strategies and digital transformation.


Moving forward: Diversity & inclusion for 2023 & beyond

Rt Hon Baroness Shami Chakrabarti CBE PC, Human Rights Lawyer, Campaigner, House of Lords; Elaine Morton, Head of Legal, Conduct Risk & Financial Crime, Building Societies Association; Kate Ireland, Chief Internal Audit Officer, Yorkshire Building Society; Richard Rowntree, Managing Director – Mortgages, Paragon Bank

Baroness Shami Chakrabati spoke about the importance of equity.  She highlighted a number of institutions in public life, giving the example of the Supreme Court, which has twelve justices. Six studied at Oxford, six studied at Cambridge, three are called David, and there is only one woman. She also spoke about the civil service, which has never had a female Cabinet Secretary, the wide diversity at a junior level within the charity sector (but not amongst more senior roles) and politics. While the UK has now had its first non-white Prime Minister, Labour has yet to produce a female leader.

She reported that the Oxford English Dictionary defines equity as the quality of being fair and impartial. It is also related to share ownership, which she considers relevant in the context of fairness and value.

Baroness Chakrabati turned to Artificial Intelligence and algorithms, which is already impacting the ability of women and non-white races to get jobs and loans. It is a non-human decision, but a human element is needed in the process as well. She recognised many building societies have continued to deliver a high street presence which has a human element.

Richard Rowntree noted that financial services has the biggest class related pay gap (£17,500) and that socio-economic diversity has yet to come to the forefront. The reality is that your chances in life are set by what your parents did. Paragon Bank is aiming for 50% of its leadership to come from non-professional socio-economic backgrounds, and they are starting by collecting data and benchmarking.

Kate Ireland raised the concept of having the best candidate possible by widening the gate, not lowering the bar. She also highlighted that once there is a diverse workforce, they need to have a voice.

A human-centric approach to support digital member experience

Jerry Young, CEO, ieDigital; Rob Thickett, Policy Manager, Building Societies Association; Garry Larner, Commercial Director, ieDigital; Steve Lowe, Head of Marketing, ieDigital

In this session, led by ieDigital, they started by noting that many building society customers have chosen their provider because of the personal, human service they receive. But as consumer behaviour changes, with more customers interacting through digital channels, how do building societies provide that human touch which differentiates us from our plc competitors?

When developing digital channels, the starting point should be the customers’ needs and wants – and what service you want to provide. But it’s also important to remember the value our members place on the personal connection with your team, so focusing on how two-way communications can be achieved is also important. Screen sharing, book an adviser chat, and access to screens in branch, are all options that allow the customer to use their channel of choice whilst making their financial journey as frictionless as possible when they need guidance or support – or simply choose to interact through a different channel mid-transaction.

Investing in digital enables customers to be better connected and in control of their finances, leading to better financial management. It is, however, possible to invest in digital whilst retaining a member-centric approach.

Agile leadership to drive digital transformation

Kate Moore, Ways of Working Delivery Lead, Nationwide Building Society; Steph Alston, Agile Coach, Skipton Building Society; Darrell Jaggers, Chief Information & Transformation Officer, First West Credit Union; Rob Thickett, Policy Manager, Building Societies Association

Agile should be a verb not a noun, according to our speaker this afternoon, Darrell Jaggers of Vancouver-based First West Credit Union, it’s how we do something not something we do. Darrell was here to talk us through their journey of shifting from a traditional organisation to an Agile model.

Becoming an Agile organisation changes the leadership role, to one where leaders set the goals and the direction of travel, and then teams are built around the end-to-end delivery, with individuals empowered to determine the how.

To start the process of moving to an Agile way of working requires complete buy-in of the Board, CEO and the senior team.

There are many benefits of moving from a ‘command and control’ leadership approach to Agile, including reduced friction across teams and improved efficiency. Agile leadership also means the employees are given more interesting work to do, which in turn improves talent attraction and retention.

Digitising the house buying process - could technology make a 20-minute house sale a reality?

Arman Tahmassebi, Chief Operating Officer, LendInvest (Chair); Lewis Scott, Chief Executive Officer, Homely; Stuart Young, Managing Director, Etive Technologies; Maria Harris, Director, Digital Cat Consultancy; Krystle Kocik, Chief Product & Experience Officer, Pexa; Colin Fyfe, Chief Executive, Hinckley and Rugby Building Society

This session explored what the future holds for the house buying process, in particular digitising the mortgage and conveyancing journey.

Whilst the average time to buy a property is 12 weeks, Maria Harris told delegates that in reality, the end to end process is closer to 150 days, with one in three purchases falling through. Maria said the technology and processes that could improve the journey already exist so the main issues are lack of collaboration and end to end process thinking. She acknowledged that there are big challenges to solve.

Colin Fyfe spoke about the issue from a lender perspective, highlighting both collaboration and technology as key to improving the process and how the fragmented nature of the market means numerous pain points. Colin also spoke about the Hinckley & Rugby’s partnership with PEXA, which allows the Society to clearly define at the outset the time between offer to completion of a remortgage.

Krystle Kocik spoke about the work that PEXA has done in Australia and how they are trying to replicate that in the UK. She highlighted data as key, leading to better models and decision making. Making property information available as early as possible enables lenders to make a decision and gives buyers full sight of the property at an early stage. Krystal underlined how important collaboration is to improve the process - in Australia, lenders realised that they needed to join forces to transform the market and create a set of guidelines.

Both Stuart Young and Lewis Scott talked about the benefits for customers in harnessing technology and Open Banking, which it is regularly used in the rental sector for reference checking, but there is a trust issue within the home purchasing process. Stuart highlighted the importance in conveying to customers why Open Banking data is being used, that their data is secure and they can manage it and have complete control. Stuart went on to encourage building societies to drive this behaviour change.

Stuart also spoke about the work Etive Technologies are doing on the Digital Identity Trust Framework project for the Home Buying and Selling Sector, which aims to provide one identity which lenders can rely on.

Levelling up regional strategies

Adrian Smith, MBA, OBE, Chief Executive, Reclaim Fund Ltd (RFL); Richard Norrington, Chief Executive Officer, Suffolk Building Society; Michael Conville, Chief Customer Officer, Newcastle Building Society; Shivani H. Menon, Researcher, Onward

Adrian Smith, Chief Executive of the Reclaim Fund Limited, opened the session highlighting the work the organisation did with the Dormant Assets Fund. This fund, using unclaimed assets from banks and building societies, has been used across all regions and countries in the UK to support a wide range of good causes. The current priorities focused around financial inclusion, young people, climate, and the voluntary sector.

Michael Conville, Chief Customer Officer at the Newcastle Building Society, spoke about the important of purpose for the organisation. This focuses on three partnerships: the high street, talent, and partnerships. In practice, this looks like developing their branch network and supporting local service provision (high streets), developing new talent across the community and investing in partnerships with the Sir Bobby Robson Foundation, Newcastle United Foundation, Citizens Advice Gateshead and the Princes Trust.

Richard Norrington, Chief Executive of the Suffolk Building Society, shared how the Society had relaunched its purpose. It consulted with members and other stakeholders on the values for the organisation and focused on nature, safe homes and trust. This then rolled out to ensure that promotional material consists of photos of members, ensuring volunteering time is spent with one of the charities they support and promoting the charities at the AGM (with over 350 attendees).

Shivani H. Menon, a researcher at the Onward thinktank, shared the findings of their report and spoke about the importance of high streets for economic and social relevance and how community assets illustrate civic pride and economic strength. She highlighted some key factors that could help communities thrive, including: Business Improvement Districts, community ownership of assets, hyper local industrial strategies, and public health campaigns.

Keynote: Housing in a higher interest rate environment

Andrew Wishart, Senior Property Economist, Capital Economics

Although the economy had been surprisingly resilient over the last year as gas prices have fallen significantly, Capital Economics expects economic growth to contract slightly as the substantial hikes in interest rates come through. The increase in the unemployment rate shouldn’t be too great, however.

Headline inflation is expected to come down fast, but core inflation (excluding the more volatile elements) is forecast to be more stubborn.

Andrew anticipated that the MPC would increase Bank Rate by another 0.25%pts this week to 4.5%, but Capital Economics don’t expect the subsequent rate increases (to 5%) that the wider market has priced in, unless inflation stays high. There didn’t appear to be much scope for mortgage rates to reduce further.

Mortgage affordability was shaping the market, and approvals activity had been subdued relative to historic trends, though the March figures had shown an uptick in lending. These affordability pressures lead Andrew to expect further house price falls, with a 7% decline on top of the 4% we have already seen.

Growth in rents will remain strong as first-time buyers’ affordability is stretched. But we are likely to see homes shift from the rental to the owner-occupier sector as some landlords sell.

Keynote: The modern mutual challenge 

Debbie CrosbieCEO, Nationwide Building Society

Debbie opened by highlighting how she believes the values of mutuality are more relevant and needed than ever and how with that comes immense responsibility, but incredible challenge too.

Debbie spoke about the benefits of leading a mutual, where social purpose is as important as business performance, where you can choose to invest in branches and where community and customers are at the forefront of everything you do.

Debbie went on to share with delegates how she believes that banking can, and should, be fairer and how mutuals should do more to secure change in society. She highlighted how for many, life has never been so volatile or uncertain and how a lack of savings for many leads to financial vulnerability.

Debbie also spoke about the key critical challenges of how we as a sector attract younger customers in a changing world and about how purpose could be key in this. Balance between respecting heritage and history and modernising and adapting is critical.

Debbie concluded her speech by challenging the mutual sector to rise to the challenge of how we adapt to a changing world while also staying true to our roots.

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