Building societies - learning for the future

By Robin Fieth, Chief Executive, The Building Societies Association

Nearly a quarter of a millennium ago, in 1775, workers in newly industrialising Birmingham were drinking in the Golden Cross Inn, complaining bitterly about their appalling living conditions and rip-off landlords. The story goes that the pub’s landlord, one Richard Ketley, quite possibly fed up with their loud moaning, suggested that instead of buying another round of drinks they put the money in a jar, start a savings club and buy some land to build their own houses. And so Ketley’s Building Society was born, the savings built up, land was purchased and houses built.

As the building society movement grew, and particularly as savers and borrowers started to become separate categories of member – some saving, some borrowing, some doing both – those managing and running building societies started to come more from the trade and professional classes, such as butchers, tailors, doctors and surveyors. Rolling forward 200 years or so, and in the aftermath of the 2008 financial crisis, there was significant regulatory pressure on building society boards to modernise and professionalise, away from longstanding and upstanding members of the community and towards people with deep financial services experience.

Post pandemic, expectations are on the move again. Amid the rise of stakeholder capitalism and an increasingly vocal debate of the purpose of business in society being much more than maximising profits for the benefit of external shareholders, many building societies and credit unions have become far more explicit about their purpose as businesses – which has always been to maximise value for their members and communities. Here are three stories to illustrate how that is playing out.

Glasgow Credit Union – Directors Academy

The Glasgow CU Directors Academy, launched in 2019, is a six month programme offered to members of the Credit Union, which ensures that regardless of knowledge or background, all members have an opportunity to gain the skills and experience required to take on a Non-Executive Director role. Through development courses and shadowing, the programme incorporates: the role of the non-executive director; boardroom behaviours; finances and risk management; business models, strategy and structure; operations, oversight and governance; and the Senior Manager and Certification Regime (SMCR). Thirty-six participants have now graduated from the scheme, with five having joined the credit union board and others taking non-executive roles elsewhere.

Leeds Building Society – “Being You: Transforming Us”

In 2022 Leeds BS launched a new inclusion and diversity strategy to meet their ambition to build a truly diverse workforce, because they believe that listening to new perspectives helps to keep them moving forward. Last year they launched new apprenticeship digital work experience programmes supporting a diverse cohort of 398 young people taking their first steps on their career journeys.

The purpose of the programme is to promote awareness of financial services as a career pathway, in particular of Leeds BS as an employer, and to share insight into entry level roles that students may apply for – 45% of those joining the programme were female, 69% were from an ethnically diverse background and 29% indicated that they’ll be the first member of their family to go to university.

Newcastle Building Society’s partnerships with the Newcastle United Foundation and the Prince’s Trust

Working with the Newcastle United Futures Programme and the Prince’s Trust TEAMS programme, staff from Newcastle BS offer a range of support, including mentoring, interview skills, CV preparation and financial education. Starting in 2022, staff have worked closely with the Foundation to deliver a bespoke apprenticeship programme giving participants an authentic experience of employment within the Society.

They wanted to help people gain an understanding of working within financial services, the roles that were available, and to help them make informed decisions on what was right for them. This included delivering Newcastle BS’s first Customer Service Week to fifteen young people in March 2022, using a mixture of real world experiences and conversations to share what it means to work at the Society. All participants who completed the week received a qualification in Employability Skills and six young people were recruited as full time colleagues on a Customer Service Apprenticeship.

The common thread in all of these, and many similar initiatives across the whole of the building society and credit union sectors, is about reaching into parts of communities that might not be seen as traditional sources of new recruits. It is about offering real employment and career opportunities to those of all ages and backgrounds, who might otherwise risk being left behind. As with so much in our mutual sector, when we reflect on our roots and our fundamental purpose, we find ourselves using our collective history as the inspiration for making our futures.