This week the Whitecap team has been in Manchester for the Building Societies Annual Conference, which brings together industry leaders to deliver keynotes and panel sessions covering the key issues affecting the building society sector. Whitecap Directors Julian Wells and Stefan Haase attended and took the opportunity to catch up with numerous industry contacts, and discuss the challenges and opportunities facing building societies. We have collated few reflections from the conference in this short blog. 

Building Societies are deeply rooted in their localities. They actively contribute to improving community services, particularly in areas such as local housing, and as such play an integral role in societal development and growth. This is a sector Whitecap has always enjoyed a strong relationship with, and our regional focus, combined with our core strengths in strategy, financial services, and technology have left us well-placed to support building societies on multiple fronts.  

Next year will mark 250 years since the first building society was created, and although Whitecap has only been around for 12 of those years, we have been fortunate to count nearly half of the UK’s 42 building societies amongst our clients in that time. 

The theme for the first day was ‘Navigating Current Realities’, and on the second day the focus switched to Developing customer value, resilience’ 

The conference began with a keynote presentation by Andy Burnham, the recently re-elected Mayor of Greater Manchester. Burnham discussed the significance of investing in local communities, paralleling the mission of building societies and the goal of fostering growth and prosperity at the grassroots level. 

Mayor Andy Burnham delivers a compelling keynote address, captured in a photo at the BSA conference.

Following the Mayor’s keynote, the conference sessions explored the multifaceted landscape of building societies, from their pivotal role in the mortgage market to their commitment to enhancing financial inclusion and resilience among members.  

Rob Pheasey, Chair of the BSA and CEO of Marsden Building Society opened the sessions by highlighting that 25% of all mortgages last year were originated by building societies, with over half of this lending being made to first-time buyers. Despite the economic conditions, mortgage arrears remain low. On the other side of the balance sheet, cash savings balances with building societies grew last year at a time when they fell in other parts of the market. This market is currently more challenging for societies, and it will be interesting to see how the 2024 performance fares vs 2023. 

Rob also noted that there are 8m people with no savings, meaning these people essentially have no financial resilience. He closed by saying that building societies seek to provide to the current and future needs of their members, highlighting the integral role of building societies in shaping the economic and social fabric of their communities. 

Julian Wells, Director at Whitecap, said: 

 “The BSA conference is always a fantastic opportunity to touch base with so many people from across the industry within a couple of days. It was great to see so many of our clients and key contacts from building societies, tech providers, and the advisory community. I think this year, more than ever before, the prominence of technology providers stood out and this reflects the ongoing digital evolution of the sector.”

Image of Whitecap Director Julian Wells, Rob Pheasey, Chair of the BSA and CEO of Marsden Building Society and Whitecap Director Stefan Haase grouped at the BSA ConferenceImage: Whitecap Director Julian Wells, Rob Pheasey, Chair of the BSA and CEO of Marsden Building Society and Whitecap Director Stefan Haase 

As discussions unfolded throughout the two days, the prominence of modernisation, innovation, and strategic collaboration emerged as recurring themes, which underscored the collective endeavour to navigate the complexities of the ever-evolving financial landscape. Building societies have long focused on their core markets of mortgages and savings, but the planned M&A activity in the sector (Nationwide and Virgin Money, Coventry BS and the Coop Bank, will introduce business banking to the sector, which will be an interesting dynamic. For example, the purpose-led role of the mutual sector would seem to be well aligned with supporting the nation’s SMEs. 

Key Observations: 

  • Building societies continue to play a vital role in the mortgage market, especially in supporting first-time buyers. 
  • The growth of cash savings balances with building societies indicates trust, preference and value among consumers, although for the first time in many years, this market is becoming more challenging for societies. 
  • Financial resilience remains a critical concern, with a significant portion of the population lacking savings. 
  • Embracing technology-led change, particularly in the realm of AI and digitalistation, is emerging as a strategic imperative for building societies. 
  • The sector is set to see some interesting developments over the coming years, with Nationwide and Coventry set to scale their market presence and enter new markets. 

At Whitecap, we have a broad range of market expertise, but we have always had a strong focus on the financial services sector. Building societies have been a key area of focus for us, and we have a wealth of experience supporting them in critical areas such as business strategy, market analysis, and technology/Fintech strategy.  

Contact us if you’d like to have a discussion about the building society sector and the markets that serve it.