With consumers being given more choice than ever before, banks and building societies continue to be challenged as to how, when and where they deliver services to their customers. High street banks are fortunate to have the resources available to transform (or transition) their primary service channels, but what about building societies who face the same threats as a high street banks but with typically far fewer resources at their disposal?

Arguably with the exception of Nationwide and one or possible two others, building societies are regional institutions. They lack the scale of many of their competitors (and by default the financial clout to invest in the latest technology innovations) and because they are very focused on supporting the regional community, serve a very diverse customer demographic where personal relationships are paramount.  Whilst the benefit of being mutual eases the pressure of a publically quoted company the pressure to meet the demands of its broader stakeholder base, customers and staff in particular, is often just as great.

The traditional building society is embedded within the local community and operates to serve the needs of its members. Personal intimacy has always been at the core of the building society proposition, and customer loyalty is particularly strong in this sector, but their long term success clearly depends on their ability to appeal to a new generation of members, whom by nature will be far more technology orientated. This isn’t just about creating a digital footprint but also about developing an integrated self-service proposition and improving process optimisation.  In this context creating the right customer journeys is key, but it also needs to be recognised that the route to their introduction may be somewhat different to other financial institutions.

Building societies generally have a great opportunity to increase their reach and enhance their brand visibility through a digital footprint. Many are already looking at how to expand their digital presence and embrace innovation, for example Cumberland Building Society was one of the founding members of the mobile payments system, Paym, which is now used by millions of people. However, in order to protect the service values they support today, it is just as important they create an integrated service experience within the confines of their cost model. The key to moving forward is to identify areas where legacy systems and processes are holding progress back and focus on these areas first.

Success comes down to creating the right customer journeys, tailored to the right customer demographic. There will not be a ‘one approach fits all’ solution for building societies and each will need to consider how to keep services relevant and in line with customer expectations. For some, particularly smaller societies, the right answer might be to look at a utility model where new technology will enable societies to leverage a common infrastructure, or to consider outsourcing the physical branch and its technology but retain ownership of the staff ensuring personal intimacy remains a key aspect of their service ethos.

In today’s age of the customer, those building societies that can put the customer at the heart of the financial experience, and make the end user journey truly personal, will be the ones to succeed in inspiring loyalty. With the right approach, societies can embrace innovation to enhance profitability and ultimately deliver long term value to their stakeholders.