As has been widely publicised, the government has stated it aims to double the size of the mutual sector, which made this a timely report. It was also published in the year that marks the 250th anniversary of the first building society. Mutuality was a key theme of the opening chapter, which is explored in this first blog in the series.
Chapter Summary: Strategy & Mutuality
The first chapter of the Building Societies report 2025 examines the strategic and operational evolution of the building society sector, highlighting the need to balance growth aspirations with the enduring values of mutuality. This chapter of the report was sponsored by Mutual Vision.
Doubling Mutual Sector
The government’s ambition to double the size of the mutual sector was broadly welcomed by building societies. However, there is a clear need for greater clarity around definitions, measurement criteria, and the timeline, as illustrated by this quote from Mark Selby, CEO of Hanley Economic Building Society:
“The government statement about doubling the size of the sector is helpful. It is a reflection of our value as a sector and creates opportunities and an environment for us to flourish. However, I’d like to see more detailed plans to make this vision a reality.”
Growth
Building societies have experienced robust growth since 2021, driven by strategic market opportunities and the necessity to offset rising regulatory costs. The need for continued growth was stressed by multiple building society CEOs, inclduing Gareth Griffiths, CEO of Ecology Building Society, who said:
“Costs are increasing for smaller societies, so we need to grow. We need to ensure the revenue outweighs the fixed costs of running the business.”
Purpose and Mutuality
The sector continues to champion mutual values, with growth seen as a means to enhance its community-driven mission. This purpose-driven approach is a theme that featured strongly in the CEO interviews we conducted, and is a source of pride and passion within the sector. A quote in the report from Iain Kirkpatrick, CEO of Market Harborough Building Society, reinforces this ethos:
“Our purpose is not solely to make a profit. Our purpose is to fight for our communities and our customers to thrive. However, growth remains a priority because it leads to more profit which in turn allows us to give more back into the community.”
Employees and Cultural Change
Societies are investing in digital transformation and reskilling employees to meet evolving demands. As Richard Ingle, CEO of Bath Building Society, highlights:
“We’re focused on enhancing the capabilities of those joining the organisation, while also investing in the development of our existing team.”
Mergers & Acquisitions (M&A)
Although there has been some notable M&A activity, such as Nationwide’s acquisition of Virgin Money, Coventry’s purchase of Coop Bank, the Newcastle-Manchester Building Society merger has been notable, consolidation is not viewed as the main strategy for sector growth. Instead, organic expansion remains the primary focus.
Capital
Access to affordable capital continues to challenge smaller and medium-sized societies, and building society CEOs were clear that enhanced access to wholesale funding is vital for the sector’s resilience and competitiveness. 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. This move was announced at the BSA conference on 8th May and has been widely welcomed across the sector.
Modernising mutuality
In a rapidly digitising world, building societies face a strategic challenge: embracing innovation while staying true to mutuality. As the digital transformation of financial services (and life in general) accelerates, it’s crucial the strategies of building societies go beyond simply upgrading technology, and extend to protecting and projecting the values that set them apart.
Keeping mutuality at the core means designing digital services that prioritise member needs, deepen relationships, and reflect their purpose-driven ethos. By embedding mutuality into every digital touchpoint, building societies can future-proof their model.
This is Blog 1 in our nine-part series covering the Building Societies Report 2025. The series will include the following blogs:
- 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.
