Marsden Building Society CEO, Rob Pheasey reflects on a three-day programme with a group of BSA delegates in Boston, learning about financial services and regulation in the States.
Although there were many highlights on the Boston tour, I will reflect on the key points that I will take back and share within the Marsden...
With over 5,000 financial institutions in the US, cutting through the noise to deliver financial services to members is challenging. What strikes me about the American model is the standardisation of products and services, and the deployment of digital solutions to serve members.
In a retail market dominated by larger American banks, smaller mutual organisations have embraced technology to support their delivery. Rather than a competitive advantage, digital is seen a prerequisite for doing business- their chequing or clearing accounts are a primary aspect of ongoing member relationships.
The degree of collaboration among American credit unions really stands out. It has been formalised with a Credit Union Service Organisation (CUSO), where 20 member credit unions provide a platform for collaboration across new lending activities, loan sales service, joint purchase opportunities and management support. In coming together, the credit unions hope “to spark collaboration, joint negotiations and innovation”.
For me, regional building societies have strong informal collaborative discussions and many of us use the same technology suppliers – agreeing roadmaps for further developments and innovation.
We support one another with regulatory changes and in collaboration with third parties for products and services where we do not originate.
Retaining the brand personality of our organisations is important – our US counterparts have achieved a consistent technology delivery that is retrospectively branded to them individually. They focus on what is important to maintain their member relationships, collaborating in areas that make their business more efficient.
The reminder from the trip is the pace of fintech change and the level of disruption that is already here – the US is ahead in digital service delivery.
Customer experience & locality
Like their UK building society counterparts, US credit unions and member-owned community banks have a real affinity with their operating areas. Whilst some centre on industries or professions, the majority operate with a strong high street and digital presence. An important aspect of their loan business is based on face-to–face interaction and solid foundations for distribution.
Like us, they face the challenge of remaining relevant to their members. We see the UK financial services marketplace as being digitally disrupted, with growth in new entrants to established markets. However the pace of consolidation amongst the financial institutions in the US looks set to continue, having seen a rise in formal collaborative arrangements to share both ideas and costs.
Reflecting on the Marsden’s own business challenges, our work on customer experience and journey mapping, and greater utilisation of digital – both in platform and in customer insights – remains a high priority within our business plan.
Being Mutual Together
Our mutual heritage provides a real opportunity to deliver my two points above. With a shared interest in the building society sector, if we pool resource to develop solutions for key problems – such as mortgage retention and customer engagement – we would cut issues down in terms of due diligence, infrastructure and implementation, and see a much faster pace of development.
Often, given we have a large pool of mid-tier and smaller societies, size can sometimes be a barrier. However, I think with the right collaboration, size is an opportunity. This, combined with our heritage around doing what’s right for our members and delivering great customer experience, presents the opportunity to lead the way to delight our customers.”