Thriving Beyond Survival: The Future of UK Building Societies

Kala Desai

Mortgage Domain Consultant, BFSI CBO, TCS

Industry

Banking

Insurance

Solution

Consulting

Cognitive Business Operations

Highlights

UK building societies, integral to the nation’s financial fabric, face challenges in people, processes, technology, and compliance
They need to act swiftly, both individually and collectively, to stay resilient. Delayed actions will bring irreversible losses
Building societies need a partner who understands their operations, technological advancements and regulatory requirements while collaborating with them to achieve their goals

Introduction

UK building societies face existential challenges with intense competition from High Street Banks, fintech and increased regulatory focus

Building societies are integral part of UK’s financial system but in recent times they have been facing major challenges. Once upon a time, there were hundreds of them, but today, only 43 remain. Most of them are either merged with others or dissolved. Of the 43 building societies, only few hold significant market share, leaving most with a minimal presence. Despite their wealth of data, strong member connections, loyalty and community-driven purpose in a largely “for-profit” world, most building societies are struggling to stay competitive. Adapting to rapid technological changes is challenging, especially with limited budgets and the complexities of implementation.

Challenges

UK building societies currently face a range of market and operational challenges

Building societies are facing challenges on multiple fronts: a shortage of skilled labor, high labor costs, fragmented processes, siloed technology systems, and increasing regulatory pressures, including consumer duty implementation and validations. Building societies also need to maintain members’ trust and loyalty in a competitive, profit-driven market. There is constant pressure to deliver personalized services while maintaining cost efficiency and staying competitive.

Societies are increasingly finding it difficult to keep up with the pace of technological advancements due to their financial and knowledge constraints. They are facing difficulty in scaling operations without compromising on quality and community focus. They have limited resources for investing in innovation and modernizing infrastructure. They must also tackle the increasing cybersecurity risks and implement robust data protection measures to safeguard member information effectively. Increasing complexity of managing secure, compliant digital platforms in an ever-evolving landscape also poses a major challenge.

Solution

A custom-based recommendation designed around two operational steps and one strategic initiative to overcome these challenges

Step 1: An Operations Maturity Assessment – A comprehensive evaluation of the entire operations framework covering people, processes, performance and compliance needs to be done. This includes analyzing data, conducting interviews and holding brainstorming sessions with the SMEs and leads.

Step 2: Digital Maturity Assessment – All aspects of technology, infrastructure, tools, systems and cloud strategies need to be assessed. The findings should then be evaluated against industry benchmarks, emerging technology trends, and the organization’s current state.

The societies can then leverage the assessment results to define a transformation strategy aligned with their budget and priorities. This strategy should include a short-term implementation plan (around 12 months), a long-term roadmap, expected benefits, and measurable criteria for success. This approach will provide a clear and structured path for the future.

Strategic initiative - Technology is advancing rapidly, making it difficult and costly to frequently update technological operations while staying compliant with regulations.

Building societies should work together to explore options for a shared operations platform and services, like a call center. While this is complicated due to issues like non-standardized documents, forms, and processes, it is possible if societies are willing to collaborate.

It is a long-term process, but similar approaches have been successful in other parts of the world, albeit in slightly different forms.

Conclusion

Building societies must take immediate action to ensure their survival. Completing these assessments and implementing the recommendations will help them stay competitive. Adopting a long-term strategy, including a shared service model, can position them for sustained success and growth.

About the author

Kala Desai

Kala Desai is a Senior Domain Consultant with 23+ years of experience in Banking and Mortgages domain. She has extensive experience in mortgage operations, process transformation and consulting for some of the top mortgage lenders in the USA and UK. Kala is a licensed mortgage loan officer and leads mortgage COE for banking and finance customers globally. Kala has a post-graduation diploma in business management.

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TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

Upcoming events

TCS works hand in hand with world-leading investors.

Thriving Beyond Survival: The Future of UK Building Societies

Industry

Solution

Highlights

On this page

Introduction

Challenges

Solution

Conclusion

About the author

Kala Desai

TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

Upcoming events

TCS works hand in hand with world-leading investors.

Industry

Solution

Highlights

On this page

Introduction

Challenges

Solution

Conclusion

About the author

Kala Desai

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