Digital channels have become increasingly ubiquitous, changing the nature of interactions everywhere. The pandemic has only accelerated this shift across all demographics, reinforcing the need for public-facing organizations to have a strong and effective online presence.

The building society sector is one such segment, which is now seeing a wave of organizations embarking on digital transformation programs to ensure that their current and potential future members are provided with the best possible experience.

Those building societies that develop their digital capabilities are now setting the groundwork for long-term success. The days of a limited online and mobile presence are gone, and societies that enhance their offerings will be able to combine their core strengths of mutuality and trust with increased digital capabilities, allowing them to better meet member expectations.  

Providing members with greater financial awareness and wellbeing through digital

Since early 2020, lockdowns and pandemic restrictions have limited opportunities to spend, with many people unable to go on vacation or spend time and money socializing. As a result, savings in UK households have increased by £200 billion relative to pre-pandemic levels.

However, with the cost of living crisis affecting millions of people across the country, it’s now vital for many people to make the most of the money that they have saved over the past two-and-a-half years.

As we take into consideration the uncertain financial climate, there is an opportunity for building societies to support their members’ financial wellbeing via the implementation of innovative financial tools.

One example of technology that could be utilized by societies is Open Banking. Open Banking services can help members save, through the concept of “sweeping”. Sweeping is effectively the automatic transfer of money from one account to another. Using rules within a building society’s app, money can be “swept” from a member’s current account elsewhere into their savings account with their building society, therefore helping the member save money effortlessly.

Building societies can also support members with financial planning by helping them form healthy savings habits through the implementation of savings goal functionality within their digital channels. This functionality enables a user to create a goal purpose; for example, a holiday fund, set a target savings amount and then see a graphical representation as to how close they are to achieving their set goal.

This functionality can seem basic, but it is surprisingly beneficial, with statistics demonstrating that members who set up a savings goal save more than double compared to those who do not. This also benefits the building societies that implement this functionality as it contributes to better savings performance. It is these types of services that will help building societies support the financial wellbeing of members and drive even closer engagement.

Maximizing member engagement on digital channels through value-added content  

In the banking sector, over 80% of customers use digital channels to communicate with their banks, and for over two-thirds of customers, the pandemic elevated their expectations of banks’ digital capabilities. 

Much of these interactions between the bank and the customer come through users regularly checking their current accounts. The building society sector can differ slightly because many societies do not offer current accounts and, therefore, the customer naturally has fewer interactions with their members as they are not checking their balance as frequently.

As a result, building societies must produce value-added content within their digital channels to provide members with more reasons to visit their app or website which will lead to more member engagement.

One such way to increase engagement could be through providing access to a rewards section on an app. This could enable users to redeem discounts on a wide range of useful products and offerings, such as household appliances, fashion, technology retailers, takeaways, and attractions.

This provides a financial benefit, which encourages people to use the app more often, therefore driving engagement, loyalty, additional product awareness and further opportunities for the society.

The future of the branch experience

The brick-and-mortar experience is still a trademark feature of a good building society and is key for maintaining trust with customers. Indeed, 71% of societies consider the branch network a critical part of regionality.

Nevertheless, that doesn’t mean that building societies cannot adopt technology to enhance the in-branch experience. Strategically, building societies are aiming to develop their branch experience as well as their online presence. And in some instances, the two can work in conjunction with one another.

Messaging and appointment booking capabilities provided via digital channels are driving engagement for topics that may be more suitable in a face-to-face setting. For instance, discussions around a mortgage or the offer of a money MOT can demonstrate how a building society can enrich the member experience.

Furthermore, it should be noted that we are seeing an increase in the number of branch closures in the UK. At the time of writing, there are only half as many branches across the country as there were in 2015. Many building societies are responding with creative “pop-up” solutions in locations such as libraries, colleges and schools to support both young and elderly segments of clients. This further enhances the need for a strong technological infrastructure to enable the support of these staff with devices such as tablets.

Tablets can also help in a permanent location on the high street in several other ways. For instance, employees can use tablets to make a member feel more involved in the financial interaction or instead could be made available to allow members to “self-service” but with the safety net of having a branch colleague nearby, similar in concept to a supermarket’s self-service section. This means the branch can empower the less tech/financially savvy customer, helping those who might not have access to adequate devices or internet but still provide that “human touch” for which building societies are known.

Digital, member-focused financial services 

It is evident that there has been a seismic change in the way that consumers use digital technology. The gap between those digitally enabled societies and those that are not digitally enabled will continue to grow in the coming years. 

The challenge that building societies face is how to attract and meet the needs of a new generation of members who are more smartphone focused. These prospective members traditionally have smaller savings deposits, and therefore are less likely to be driven by the rates of interest on a savings account due to the size of their deposits.

As a result, building societies need to find alternative methods of attracting members from these demographics, such as utilizing open banking, incorporating savings tools, and providing rewards schemes, ultimately diversifying their business model for current and future generations.

Sopra Banking Software is a digital transformation partner for building societies, with custom built tools that put your customers first and enhance the unique capabilities that your members value. Get in touch with a member of our team today to find out how Sopra Banking Software can help your building society get closer to your members.

Robbie Avill

Product manager

Sopra Banking Software