Why building societies should use technology to build stronger member relationships, not just better products – Sumsion
Building societies have always been built on relationships.
Long before digital banking, apps and online journeys, mutuals existed to help people achieve some of life’s most important ambitions: buying a home, saving for the future and improving financial security for themselves and their families.
Yet I believe that too much of financial services is still organised around products rather than people. We talk about mortgages, savings accounts, ISAs and current accounts. We measure product sales and balances. We structure teams around product lines.
But the challenge we have is that customers don’t think about their financial management in this way. People think about getting on the property ladder, moving to a larger home, managing rising household costs, supporting children as they become financially independent, planning for retirement, and building long-term security. So, why do those that work in financial services insist on being so product-focused?
Being present in our customers’ lives
For financial companies to remain relevant to their customers in the future, it will be important for them to truly understand those life goals and build relationships around them – rather than simply offering financial products at key points in time.
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For building societies, this presents both a challenge and a significant opportunity.
The challenge we face is that customer expectations are changing rapidly. Today’s consumers compare every customer interaction against the best experiences they receive elsewhere. Whether ordering goods online, booking travel or managing subscriptions, people increasingly expect services to be simple, intuitive, and available when and where they need them.
The financial services sector cannot ignore those expectations.
At the same time, building societies have an advantage that many larger financial services institutions would welcome. Mutual organisations were never created simply to maximise short-term profit; our purpose has always been rooted in supporting members and communities over the long term.
Technology, therefore, should not be viewed as a race to keep up with competitors. It should be viewed as an opportunity to strengthen that relationship-based purpose.
The mistake many companies make is treating technology as the destination.
Customers do not wake up wanting a mobile banking app, they don’t aspire to complete a digital mortgage application and they certainly won’t care what lending platform sits behind the scenes to make it all happen.
What customers want is confidence, convenience, reassurance and support – and technology matters because it helps deliver those outcomes.
A well-designed mobile app can give customers greater visibility and control over their finances wherever and whenever they need it. Digital mortgage journeys can reduce paperwork, complexity and waiting times. Better use of data can allow organisations to anticipate customer needs and provide more relevant support throughout different stages of life.
The technology that drives this control is often invisible to the customer. What they remember is how easy an experience felt and whether their financial provider helped them achieve their goals. This is particularly important for building societies who are increasingly looking to attract younger generations.
Many younger customers will have little to no loyalty to traditional financial brands and some won’t even know the difference between banks and building societies. They are accustomed to digital experiences that are personalised, responsive, and seamless. If mutuals want to remain relevant, they must meet these expectations while remaining true to their distinctive purpose and values.
I believe the answer for mutuals is not to become a digital-first technology company.
The answer is to use technology to enhance what building societies have traditionally done best: building trusted relationships.
Embracing a digital future
At Monmouthshire Building Society, this thinking shapes much of our transformation agenda. Whether investing in new digital capabilities such as our mobile app, transforming lending journeys or simplifying internal processes, the objective is consistent. It is about making banking and homeownership easier for customers, reducing unnecessary friction, and helping colleagues spend more time supporting customers rather than navigating complexity.
Ultimately, I believe the strategic question facing our sector is not: ‘How do we sell more products?’ Instead, it is: ‘How do we become more valuable to our members throughout their lives?’
Technology will play a vital role in answering that question. However, the winners will not be the organisations with the most technology; they will be the companies that use technology most effectively to deepen relationships, improve outcomes and remain relevant to the next generation of customers. And that feels like an opportunity mutuals are uniquely positioned to seize.
