To close the series, we explore the vital themes of Regulation, Policy & Risk, areas where proportionate governance and strategic advocacy are key to future growth. This chapter of the report was sponsored by nCino.
Chapter Summary: Regulation, Policy & Risk
Building societies operate in a highly regulated sector which is facing a growing volume of complex requirements. Recent years have seen stricter regulations, focused on financial resilience, consumer protection, and the ability to address emerging risks, especially in cybersecurity and operational resilience. Our interviews with CEOs highlighted that regulation and compliance has become an increasingly significant consideration for their organisations, as reflected in the sentiment illustrated on the graphic above.
Proportionality and Sector Advocacy
Building societies continue to call for a more proportionate regulatory approach. While they support the principles of regulation, the burden on smaller institutions is disproportionately high. There is consensus that rules should reflect the scale and business model of societies, as indicated by Julie-Ann Haines, CEO of Principality Building Society (and now Chair of the BSA):
“Currently, regulation isn’t proportional. It should be scaled appropriately by the size, balance sheet, and complexity of each firm. Regulation may now be acting as a barrier to growth for some organisations, rather than an enabler.”
Shortly after the publication of our report, The Prudential Regulation Authority (PRA) published CP 11/25, a consultation paper which proposes the retirement of the Building Societies Sourcebook SS20/15, a move which would level the playing field between building societies and challenger banks.
Level Playing Field in Mortgages and Savings
Stakeholders are keen to see competitive equity across the financial sector. Non-bank lenders and fintechs often operate under different regulatory frameworks, creating an uneven playing field. Societies urge regulators to ensure fairness while enabling innovation.
Susan Allen, CEO of Yorkshire Building Society, highlighted that there are issues for organisations of all sizes:
“The number of different regulations and regulatory changes is a big issue for everybody, whether you’re a big bank or a small building society.”
Policy Engagement and Government Support
The government’s ambition to double the size of the mutual sector is welcomed, but societies are looking for concrete policies to match this ambition. These include tax incentives, access to capital, and regulatory recognition of mutual business models.
Risk Management and Governance
Societies are evolving their risk functions to keep pace with emerging risks, including cyber threats, climate risks, and economic volatility. Boards and executive teams are investing in capabilities, scenario planning, and culture to ensure long-term resilience.
“There are opportunities for us to use technology more in relation to regulation and improve our processes, whether that’s through AI or other FinTech solutions”
William Carroll, CEO, Monmouthshire Building Society
Operational Resilience and Third-Party Risk
As societies adopt more third-party technology and data solutions, operational resilience becomes critical. Regulatory expectations around outsourcing, data protection, and service continuity are increasing, requiring close oversight and robust frameworks.
Balancing Compliance and Innovation
The sector continues to seek the right balance between compliance and agility. Societies that embed regulatory awareness into innovation processes are better positioned to deliver compliant, customer-focused solutions without delay.
Many CEOs pointed towards the role of technology in enabling their organisations to adhere to regulation, including Andy Deeks, CEO of Leek Building Society:
“Looking back at the pre-2008 mortgage market, there’s a lot to be said about how the market functions more effectively today than it did 20 years ago. In the long run, I feel regulation benefits the sector.”
What next?
Regulatory change is not going to slow down and will continue to present challenges in terms of both resource and cost. To keep pace, societies must increasingly embrace technology and data-driven solutions to meet regulatory requirements more efficiently. At the same time, it’s crucial to engage in active lobbying and collaboration across the sector to shape proportionate regulation and share best practices.
This is Blog 9 in our nine-part series covering the Building Societies Report 2025. You can explore the full series here:
- Blog 1: Strategy & Mutuality
- Blog 2: Mortgages
- Blog 3: Savings
- Blog 4: Branch of the Future
- Blog 5: Homebuying Process
- Blog 6: Green Finance
- Blog 7: Diversification & Collaboration
- Blog 8: Technology
- Blog 9: Regulation, Policy & Risk
The Building Societies Report 2025 was created in partnership with the Building Societies Association and made possible by the support of sector sponsors including: BJSS, Digilytics, Finova, FintechOS, FIS, GDS Link, Mambu, Mast, Monument Technology, Mutual Vision, MQube, nCino, Ohpen, PEXA, Phoebus, RSM UK, SBS, Target Group, Temenos , Unblu, Unisys, and Vilja Solutions.