Guest blog by Camillo Baratta, Industry Advisory FinServ, Salesforce.  First published in Society Matters magazine. 

2020 changed many aspects of our lives forever.  From member expectations to accelerated digitisation at scale, last year changed the way building societies need to engage with their members.  How can they keep true to their values of trust and community while embracing the digital future and fulfilling member expectations?

Building societies have always been at the heart of their communities, serving the needs of members who value a personal, branch-based service and face-to-face value and trust.

The year 2020 has accelerated the challenges of delivering such a personalised service in a digital age. Even before lockdown, building societies faced the erosion of their main margins due to macro/regulatory forces and competitive forces (c. 75% and 25% of total erosion, respectively [1]), and the need to provide services beyond savings and mortgages.

Neo-banks, fintechs and bigtechs encroaching on market share demand a more agile and entrepreneurial approach than building societies. Costly branch networks, legacy systems and an older customer base are all issues that fintechs and neo-banks do not face.

We believe now is the time to reinvent the ‘member first’ philosophy to retain trust and strengthen member relationships in the ‘new normal’.

Covid: A five-year jump into the future

2020 has amplified existing industry trends by 3x: whilst branches and ATMs were used 5x and 2x less, respectively; member interactions via chat, mobile and video increased 3x – all this underpinning the need to be agile and digitally enabled across channels [2].

Member expectations are changing and building societies are struggling to meet them, whilst challenger banks and ecommerce providers have set the satisfaction bar high. Finance apps have increased customer engagement and expectations are continually rising.

The traditional society value is diluting. The face-to-face value of the retail banking and building society industry has been reduced as services migrated online. Members now expect to be able to borrow up to an agreed limit at any time, be told what they are spending money on and how they can save, and are willing to share their data for value-adding services. They want to enjoy a personalised service in their banking, having seen personalisation in other areas of their life, such as commerce and streaming services.

E-commerce providers have been working hard to provide a seamless experience and frictionless onboarding, prompting members to expect the same levels of service in all aspects of their lives. They want to be rewarded for their business and to pay for goods and services instantly using whatever device they choose.

Digital transformation also significantly impacts employees, who need to be given the opportunity to up-skill and translate their skills from human interaction to digital interaction to continue delivering trust and value to members.

How technology can help to become future-proof

We see three pillars of success for building societies:

• Differentiate through member experience
• Enable employee success through collaboration and integration
• Accelerate innovation using platforms

Ask yourself, is your current process truly customer-centric? Technology enables you to provide seamless processes, personalised journeys, relationship intelligence and goals-based advice for your members. For example, Salesforce is working with The Nottingham to create a secure

omni-channel member experience that supports growth. This has allowed members to access products and services when and how they want: face-to-face, phone or online. It has provided a secure and improved mortgage platform for brokers that allow them to streamline processes to benefit from faster turnaround times.

Furthermore, building societies can harness the power of intelligent automation to supplement and enhance high levels of engagement across channels. By leveraging analytics and intelligent notifications powered by AI, members can save more effectively and be incentivised to keep saving. Finally, a high degree of integration can ensure members feel valued along the whole member lifecycle.

[1] State of the FinServ Industry 2020

[2] Global consultancy Bain & Company

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The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.