Keynote: Opportunities and challenges in a changing landscape

Emily Shepperd, Chief Operating Officer, Financial Conduct Authority

Emily started her address by highlighting how building societies have long been champions of under-served markets – reaching more complex first-time buyers, the self-employed and other customers who often find themselves overlooked by other high street lenders – spotting opportunities when others see risks.  This has led to building societies being recognised as an important part of the communities in which they serve.

She warned that there is little choice about becoming more digital, however hard that may be with legacy systems. Building societies must not let their hard-won reputations for integrity – a value that is in tune with younger generations – be overlooked in favour of challenger banks. In doing so, they will not only survive but thrive in an increasingly competitive landscape.

Extended mortgage terms

Recognising the rise in longer-term mortgages, Emily highlighted that this was a symptom rather than solution, as borrowers will pay more overall. Whilst extending mortgage terms will be appropriate for some, lenders must always ensure that lending is responsible and in the long-term interests of the consumer.  

The Mortgage Market Review came in 10 years ago, as there could be no return to unaffordable mortgages.  As an outcome-focused regulator, the FCA reflects on how their standards are applied and the impact they have on different customer groups. The comparative arrears levels, between pre and post the Mortgage Market Review show that mortgages originated in 2007, after 10 years 4% were in arrears. Of those originated post the review, that figure falls to 0.8%.  

The current rules allow lenders flexibility, and the FCA is open to discuss any propositions. 

Lending into retirement

Lending into retirement is moving from a niche to a norm, as we are seeing a greater proportion of mortgages projected to mature around state retirement age. 

Building societies recognise the risks and needs of borrowers looking to borrow in later life. Now is the time to consider the products and services you will provide to those borrowers to meet their needs responsibly. 


One area where building societies have taken robust action is making savings rates more competitive. 

Although it is not the FCA's intention to regulate savings pricing, from July the Consumer Duty will apply to closed as well as open financial services products.  Emily said that it is good to see building societies appointing Consumer Duty champions at the right level.

Recognising that building societies pay, on average, more savings interest than banks, Emily noted the vital role they have in promoting a savings culture. She encouraged societies to continue to engage with initiatives aimed at building greater consumer resilience. 


  • Building societies have demonstrated their resilience and adaptability. They have also helped consumers build their resilience, not giving up on them when the going got tough, reaching out to under-served groups and turning risks into opportunities.

  • They must embrace technology and continue to evolve without losing their community-centred credentials 

  • Lenders need to continue to innovate to support their customers and watch that they, and their customers, do not take on too much risk

You can read the full speech here.