Despite the difficult post-COVID economic circumstances, many building societies have thrived and grown in recent years. According to BSA statistics, UK building societies lent £33.8 billion and saw 70,300 first-time buyer mortgages in the first nine months of 2023 and attracted £18.9 billion in cash savings. This was a significant contrast to the £6.7 billion fall in savings balances across other institutions. A key driver in the success of building societies is their ability to adapt quickly in an ever-changing market, enhance their processes through learning, and continue to offer members the best possible experience. One way that building societies can improve their offering is through partnerships and collaboration with their peers. In this article, we will explore the value of user groups and the importance of cultivating collaborative supplier relationships.  

Engagement Model Structure

Central to this model, user groups are an effective way for societies to collaborate with each other and a shared supplier. They are a forum that allows societies to deliberate activities, policies, and ways  to apply these requirements operationally. They are an important platform for engagement, enabling participants to leverage their collective voice to influence decisions about product offerings, customer service, and other solutions.

However, user groups themselves can be at multiple levels, and are just one aspect of the overall engagement model. Typically, depending on the audience or desired outcome, different people from different parts of the business will come together to collaborate. For example, societies may participate in a senior user group for leaders to discuss overall direction, a working party for users to discuss how  particular ideas would work in practice, and a focus group to discuss how to improve the overall member experience. 

Cost Sharing

Cost sharing is an effective way for building societies to spread costs and reduce unnecessary spending. By co-investing in larger initiatives such as technological advances, they can vote on and help shape a product roadmap, and collectively benefit without having the financial burden of tackling development themselves. This increases possibilities for innovation through the combined financial power of the whole group, ensuring that both large and small organisations benefit. 

The economic gains due to cost sharing decrease a society’s own operational costs, enabling further investment into the service provided to its members. The Thomson Reuters Cost of Compliance 2023 report shows that building societies achieve a 20% cost savings in regulatory compliance by sharing legal and compliance services. 

Improved Decision Making & Insights 

Collaborative decision-making is a powerful way to harness the collective intelligence and diverse skill set of the user group. This results in more out-of-the-box thinking, providing compelling business cases that enable collective development to achieve outstanding results.

Experience and different perspectives are shared during the decision-making process. By utilising collective best practice of building societies of all shapes and sizes, the group can learn and apply the experience of others to internal processes to improve operational efficiency and collectively innovate the market. This ensures a cycle of continuous improvement maintain operations through industry ups and downs.

Another aspect of this approach is that building societies have access to very comprehensive industry insights not only from other building societies,  but also from third-party analysts that their service provider will work with  .  This wealth of input will not only help the group come to a decision about a product or service but will also help them innovate within the sector. This could be through the generation of new specialised products such as LISA, product switch capabilities, open banking and even new channels such as mobile apps. 

Risk Mitigation

Standardising operations helps to minimise operational risks for building societies. Uniform procedures allow societies to maintain a high level of quality and reliability in their operations. By establishing predictable and manageable processes such as standardized risk assessment frameworks, organisations can see a marked decrease in operational risk.

Having a shared risk model significantly improves regulatory security and embedding compliance in programmes helps to prevent regulatory breaches. By pooling resources and knowledge, building societies are better positioned to navigate the maze of regulation, compliance, and legal risks. 

Collaboration at SBS

At Sopra Banking Software, we see the benefits of user groups first hand. Working in collaboration with over 450 attendees per year across  twelve working parties and  four AGMs, our user group structure is the largest in the industry. In the last two years, over  one hundred improvements have been brought forward during the user groups. 75% of these suggested improvements have come from SBS, demonstrating our own contribution to this process through innovation and thought leadership.

By having numerous organisations working together, we can all work to create a more rounded solution, which enables us to create more rounded products with enhanced capabilities.

We believe that the success of our clients can be achieved in collaboration with their user group and by sharing ideas in different forums to learn from each other. Current chair, Nick Longar of Swansea Building Society said

“The User Group provides a powerful platform for collaboration and shared learning among our members. By bringing together diverse perspectives and experiences, we can collectively address common challenges and explore innovative solutions. This approach not only enhances our decision-making process but also drives continuous improvement across our operations. The User Group fosters a strong sense of community and mutual support among its long-standing members. This partnership not only enhances our individual capabilities but also strengthens our collective voice in influencing key decisions related to product offerings, customer service, and our strategic initiatives. I believe it’s an invaluable asset that drives innovation, operational efficiency, and regulatory compliance while fostering a collaborative and supportive community.“

To learn more about the mortgage and savings solutions we design in collaboration with user groups and working parties, please visit our website.  

Sopra Banking Software are Associate Members of the Building Societies Association.