Nikhil Sengupta, Commercial Director at 10x Banking, visited the Building Societies Annual Conference in Birmingham. He shares his reflections from BSA25 – a sector ready for the transformation opportunities ahead.
There are some industry events that leave you buzzing with anticipation for the future.
This year’s Building Societies Annual conference was one of them. While the celebration of 250 years of building societies was a central theme of this year’s conference, BSA25 also left me – and all the other attendees – with a real sense of excitement about the next wave of transformation in the mutuals sector.
The event took place against the backdrop of the UK Government’s commitment to double the size of the sector. Sessions throughout the event, and the conversations they inspired, focused on how, exactly, mutuals can make that happen.
Technology was at the heart of many of these discussions, as was how to balance the member-led traditions of the sector with the need to adapt to compete with digital-first neobanks.
Here are my three key takeaways from BSA25:
1. Digital innovation & physical presence: a key differentiator
In an era where many banks are retreating or launching entirely online, it’s inspiring to see building societies maintain or even double down on their physical presence. It speaks to how integrated and important these institutions are within their local communities, and also to the need for digital solutions to work hand-in-hand with in-person solutions to deliver the best member experience.
At BSA25, a number of sessions focused on the importance of harmonising this commitment to physical presence with a leap forward in digital innovation. Societies like Coventry and Nottingham highlighted how modernizing digital systems can enhance member experiences without eroding human connections. For example, Nottingham Building Society’s adoption of the MQube mortgage platform streamlined broker interactions and accelerated underwriting, proving that technology can amplify, not replace, personalised service.
2. Modern regulations needed to unshackle growth
Another recurring theme at BSA25 was the urgent need for regulatory reform. The sector’s current rulebook, designed for shareholder-driven banks, often stifles mutuals’ unique strengths. Robin Fieth called out SS20/15: “As a starter for ten, we currently have a Sourcebook (SS20/15) that is anti-competitive, outdated and hinders growth. That needs to change. As does the approach to all other banking regulations that tend to be designed for shareholder-owned banks and then applied (without adjustment) to mutuals."
This misalignment hampers growth at a pivotal moment. With the UK government aiming to double the mutual sector’s size, outdated regulations are a handbrake on sector acceleration. Societies need regulations that recognize their member-centric models – whether in capital requirements, governance, or innovation incentives.
3. Collaboration as a catalyst
If digital innovation and regulatory reform are the route to the future success of the mutuals sector, then collaboration is the vehicle.
Multiple sessions highlighted this, with societies like Cumberland Building Society and Coventry Building Society talking through their process of modernizing legacy platforms and again emphasising the importance of senior teams, tech providers and colleagues working together to ensure the success of any migration.
New approaches to core banking, such as the meta core, can enable building societies to overcome the challenges of legacy cores and avoid the complex set-up and scale challenges of neo cores.
Smaller societies, in particular, often lack the resources for standalone tech investment. Collaborative models, such as shared digital platforms or joint ventures, can democratize access to innovation. But building societies can also work with tech providers to begin to innovate themselves, at the core.
New approaches to core banking, such as the meta core, can enable building societies to overcome the challenges of legacy cores and avoid the complex set-up and scale challenges of neo cores. What this means in practice is that mutuals can harmonize in-branch and digital experiences and cater to the changing needs of members at a massive scale, while reducing risk and cost.
Honouring the past, building the future
A 250-year legacy has been forged through various crises, recessions, and societal shifts, and left mutuals well-placed to appeal to a new generation of members with a purpose-driven approach to banking.
But BSA25 made clear that relying on this legacy won’t be enough to thrive in the future. Building societies possess just a third (32%) of market share and are struggling to attract the younger generation of savers. The market share drops to just 24% amongst 18 to 34-year-olds. Mutuals have aging member bases, and they need to adapt to connect with younger generations to avoid stagnation.
The path forward requires societies to:
- Embrace hybrid models that blend physical presence with digital agility.
- Champion regulatory reforms that reflect their purpose-driven ethos.
- Prioritize collaboration to scale impact without compromising local ties.
This means embracing technology that amplifies mutuals values, forging partnerships that extend their reach, and educating younger generations about the power of member-owned finance – something which mutuals like West Brom Building Society are already acting on.
A final thought
Collaboration shouldn’t stop at national borders. Many of the same challenges and opportunities can be seen around the world, and there is much to be gained from learning across geographies. Mutuals in the ANZ region, in particular, share many commonalities with the UK sector – from regulatory pressures to member expectations – and it will be fascinating to see what insights emerge from the COBA conference in Brisbane this August.
