Building a Bright Future for Building Societies | Part 1 | Mambu’s Banking Insights for Growth

What does the future hold for Building Societies?

Mambu‘s Banking Insights for Growth is all about delivering actionable advice to help institutions better serve their customers. This week’s episode provides plenty of that.

This time Nick Lawler from Mambu speaks to Michael Fisher from Mutual Vision to discuss how Building Societies can attract Gen Z consumers and continue to deliver a competitive and attractive service.

From niche, community-focused products to a more effective use of data, there’s a lot of potential here. Our speakers are perfectly placed to talk about this too. Mutual Vision is a specialist in building digital banking platforms and partner ecosystems for specialist lenders with mutuality at the core and Mambu is one of the leading providers of banking technology, so know what it takes to digitise a bank.

There’s more to come in Part 2 of this conversation, and Mambu also has a new blog on this topic – Head here to read more about how building societies are embracing technology for community-centric growth.

Attracting a new generation of customers

There’s no question that building societies need to attract a new audience and shore up their future. They still command a significant share of the market, with 2023 statistics showing they have 24% of the £58.5 billion total mortgage lending in the UK, and a 19% share of savings.

But the demands of customers are not always being met. In one survey, almost half (47%) of building society customers reported difficulties engaging with their services and 73% of 18-34 year olds said they look for an easy-to-use app when choosing financial products, something not all building societies have.

According to our speakers, there’s a number of things these established organisations can do. Both Fisher and Lawler emphasise the crucial role of technology in meeting the expectations of a tech-savvy generation accustomed to smartphones and seamless digital interactions. At the end of the day they’re competing against digital-first challengers and larger financial institutions.

Despite this focus on technology, Lawler, Market Director for EMEA at Mambu, does acknowledge that while technology is essential, it should be in line with a customer focused strategy, especially since traditional products like mortgages may not immediately attract younger generations.

Instead, products that encourage savings through modernised, user-friendly applications could engage Gen Z. Moreover, innovative savings products, such as those that reward achieving financial goals, could also be compelling. Regardless, there’s no question that technology should be integrated across all touchpoints, ensuring a cohesive and engaging user experience both online and in branches.

Agile Technology Stacks

Another point made in the conversation is that building societies’ physical branch networks remain significant, serving as a differentiator that fosters community connections. But they need to provide excellent customer experiences, supported by technology to streamline processes and enhance interactions. One way of staying attractive is offering niche, community-focused products tailored to local needs, something that larger national banks might overlook.

What is clear is that monolithic systems of the past are inadequate for today’s needs, and building societies must adopt composable architecture that supports diverse functionalities and frictionless user experiences. This approach allows them to leverage the best Fintech innovations without being constrained by outdated systems.

An institution’s capabilities when it comes to implementing and managing new technologies can vary so that’s for them to work out and organisations must balance transformation efforts with ongoing operations. Choosing the right technology stack is crucial, not just for immediate needs but for long-term viability. Our speakers suggest considering managed services or delivery partners to bridge capability gaps and ensure a smooth transition.

The discussion also goes into depth on a number of other points including the strategic use of data to enhance customer engagement and product offerings. It’s also just part one of two! There’s more on this fascinating area of the financial ecosystem coming soon.