Good afternoon everyone and welcome to the third day of the BSA Conference, live from our studio in London

I am Mark Bogard, the new Chair of the BSA and Chief Executive of Family Building Society.  I am your host for the next two days of the BSA conference.

The theme for today’s session is Outcomes based on Conduct and our agenda is full.  I am expecting a range of thought provoking views and questions.

The support from our sponsors and exhibitors is critical to the success of the BSA Conference and I’d like to thank our headline sponsors DXC & Temenos, nCino, Salesforce and Target Group for their participation. I would also like to thank our other sponsors Sopra Banking Software and TCS Bancs as well as our virtual exhibitors.

Thank you Mike for the last two years. You have done a splendid job as BSA Chair. You certainly picked an interesting couple of years. Hopefully the next two years will be less interesting!

What people don’t see, is that as well as all the public facing activity, you have engaged with and encouraged the BSA staff, whilst elegantly balancing the interests of the spectrum of the BSA membership and associate members.

I very much hope that Rob Pheasey, Chief Executive of the Marsden and the new Deputy Chair and I can carry on the good work.

Now, it was suggested to me that I might like to use this introduction to say something about the future.

Well, the only thing that I can predict with certainty, is that my predictions will be wrong. Having said that, I am a sucker for punishment, so I will share some thoughts on the future tomorrow.

Today I will start by looking back.

Every year, a good friend of mine organises a week in his offices for kids in their final year at university, to help them transition from student life into work.

Some of them know exactly what they want to do.  Others still have no real idea, but know that time will soon be up and they’ll have to do something. I know that their parents have a very keen interest in the outcome of these deliberations!

So my friend talks to these kids about their CVs, interview technique and presenting themselves.

He also gets a broad range of people, from lots of different sectors, to talk to them about what they do, why they ended up doing it and what they look for in graduate recruits.

In my time with them, I don’t talk to them about what they want to do, about financial services, but rather about where they want to do it.

Wanting to be a lawyer, an accountant or work in a charity, or in financial services or in marketing or in hospitality or research is fine – but probably, at least as important as that choice, is the choice about where to do this.

There are two key variables in my experience – size and ownership structure.

I have worked in large companies with more than 100,000 employees making billions; in medium sized firms and in a small firm – where the entire workforce could get in the same cab to the office from the station.

There are advantages and disadvantages to each – the trade-off generally being between resource and ability to execute. Ballerinas and elephants.

Crucially, in my experience, ownership matters just as much as size.

I have worked in a partnership; a family-controlled bank; in a systemically significant listed bank; in a firm controlled by a VC; in a small, listed company, and now in a mutual. 

What it’s like working in all these businesses and how customers feel about them has been very different.

They have different cultures; different drivers and they spend money in different ways.

The partnership was incredibly collegiate; the family-controlled bank thought very long term in its decision making; working in a listed business, reporting to shareholders on your earnings per share and dividend every six months, gave real focus and required operating at pace; being small means that you have limited resources but success or failure is down to you – you cannot blame someone at head office.

I found out quickly after starting in a building society that customers feel that bit better about us as mutuals.

Also, I was treated completely differently by journalists and politicians compared to how I had been previously, even although I was exactly the same person. They were actually interested in what I had to say, rather than wanting to skewer me. It was an enjoyable, engaging experience rather than something to be avoided and feared which had been my experience when working for example for a big bank.

That is the priceless inheritance of the mutual sector. Our history; and the way we act and behave.  

Business tends to go wrong when there is an imbalance between customers, staff and owners.

We have seen that graphically in football recently.

The best businesses, by truly putting their customers first and thinking long-term, actually create the most value in the end.  Building societies and credit unions generally do well at this, but it is not the preserve of mutuals.  Something to remember.    

When I was at Schroders doing corporate finance M&A advisory work, we worked with two of the larger building societies.

Even although it was absolutely against Schroders’ short term interest, we advised them not to do the transactions that they were considering.

As a result of this customer-first approach, Schroders created more shareholder value in relative terms over that decade than any other bank in the world bar one.

Mutuals have the benefit of having customers who are also owners, so the risk of imbalance is much reduced.

But we have no inherent right to exist. We have to earn that right. To serve a need. Do the right things.

It is about learning from our inheritance, while continuing to change and develop. As Robin Fieth, the BSA Chief Executive has said many times we need to make our future, not wait around to see how it pans out.

We are seeing a number of changes in Society today.

One that strikes me is how many younger people now think about and value social purpose - the things that building societies and credit unions live and die by.

So IF we do what mutuality says on the tin, we should be well set to continue and build on what has gone before.  The opportunity to do that is right here – our obligation is to capture it.