One of the fundamental differences between a building society and a major high street bank is the ownership structure. Building societies exist to service their members and are not required to satisfy external shareholders. Moreover, it’s these members who ultimately own the building society and their membership status gives them a say in how the business is run.
We wanted to see what our customer panel made of this and in particular if they could define the main purpose of a building society.
We also put questions to them about why they choose to manage their finances through a building society and what aspects of customer service are most important to them.
The results tie in nicely with a similar piece of research commissioned by the Building Societies Association, only in this case their Ownership Matters report captured the opinions of building society employees.
It found that the workplace culture of member-owned organisations generally supports positive outcomes for customers, most notably higher standards of service, a moderate approach to risk-taking and often better value on interest rates.
Acting with purpose
The provision of savings products and mortgages was the most common positioning for the purpose of a building society. Also mentioned were offering a place of safety for people’s savings, giving financial advice and supporting local communities.
Some respondents made connections to the origins of the mutual movement and said how the approach still felt relevant today:
“If I was in the market for a mortgage, a building society would be the place I would go to as I still believe in the principles of the original concept and how it has helped ordinary people over the years to buy and have security of their own home.
Talking specifically about the West Brom, our panel members gave us insight into what first attracted them to the Society. Offering competitive product rates was the most popular reason, given by 51% of customers. Being based locally to where people live and offering friendly service came next (both 42%).
Our mutual status also proved decisive – more than a third (37%) of the panel said they chose the West Brom because they liked the idea of doing business with a mutual organisation. They rated this more important than other influencing factors such as having online accounts (21%) and deals rated as best buys (11%).
The things that matter
We offered those customers taking part in our survey a list of service attributes and asked them to rate the ones they considered the most important.
Having knowledgeable staff was the most common response, cited by 58% of people, closely followed by being easy to do business with (57%). Next was acting responsibly by making decisions in the best interests of customers (47%), while rounding out the top five were being available when needed (41%) and showing we care and value your custom (39%).
Of these five, it was acting responsibly by making decisions in the best interests of customers that was said to be customers’ top priority from their bank or building society. Once again, we see this as demonstrating the value customers place on mutuality and being part of a member-owned organisation.
We also wanted to explore the notion of being easy to do business with a little further, particularly given how time-precious many people are and rising competition in the financial services sector, for example from smaller challenger banks.
Encouragingly, the overwhelming majority of panel members (96%) felt it was either fairly, very or extremely easy to manage their money through the West Brom. Any small issues centred around a lack of nearby branches and sometimes having to queue in order to make a deposit.
How this helps us
Customer insight into service preferences is always hugely beneficial and helps us to fine-tune our proposition through branches, the web and when handling telephone queries.
It feeds through into staff training and development and we can monitor delivery through our regular programme of mystery shopper visits.
For us, it is also pleasing to know that customers recognise the main purpose of a building society and that, in some cases, this goes on to influence their choice of financial services provider.