27 August 2020
How Building Societies Should Celebrate Their Differences
In 1992 the Cooperative Bank launched its ethical banking policy. And with it a very famous advertising campaign.
It was hard hitting, gritty, full head shots to camera. It was deliberately stark. And it laid out its position very clearly for the whole nation to hear.
The bank was taking a stand. It was going to do things differently.
It wouldn’t invest or associate with oppressive regimes. It wouldn’t invest or associate with needlessly polluting companies. It wouldn’t be associated with landmines, animal testing or climate change. In fact, it wouldn’t invest or associate with any company that didn’t share its values.
It was an incredibly bold stance to take and it worked. It attracted like-minded souls who wanted banking with a conscience. And it put clear open space between them and every other bank.
The Co-operative bank knew who they were and what set them apart.
Fast forward to today and I find myself yearning for a building society to do the same – to stand up and truly celebrate their difference.
I am a big fan of Building Societies. I always have been. I am of the generation that grew up with them. They were on every street corner. they were in every living room courtesy of our TV’s and I was proud to have, not just one, but two savings accounts.
Building Societies were a good thing. Everybody knew that and – whilst as a child I couldn’t have told you the technical difference between them and banks – everybody sort of knew they were different.
Nowadays I am willing to bet that most people under 35 would struggle to tell you anything about a building society. When I asked my twenty something daughter to name one all I got was a blank stare.
Of course, when I said Nationwide she knew the name but had no idea that they were something called a Building Society.
And what a travesty that is.
Because Building Societiesaredifferent. They are the ultimate purpose-driven brands.
They started as a way of financing and facilitating groups of people to be able to build their own homes. They were funded by the membersforthe members and without shareholders to reward they were able to plough every penny back into the organisation. They were quite literallybuilding society.
Things have evolved since then but what has remained constant is their social purpose. They have a strong value and belief system that runs through their DNA and are strong supporters of long term thinking and investing time and money in their communities.
This inherent social purpose is a key differentiator from the banks and one that could have huge currency if embraced and celebrated in a smart way through the right channels.
We live in an era where ‘purpose driven’ brands are big business. Consumers, especially the younger generations, want brands that share their own values and aren’t just about making profit. Brands with the greatest traction are those that are useful, transparent and contribute to a better society. If in doubt just ask Unilever – brands that do not have a clear social or environmental purpose risk being eliminated from their portfolio.
As world events have dictated a new way of living, we are all coming to terms with a ‘new normal’ and with that a sharper focus on, and a renewed appreciation of the communities we are all part of.
As a result, it seems to me that if ever there was a time for a Building Society, or Societies, to step up to the plate and celebrate their difference, it is now.
Only a few decades back there were over 250 building societies. Now there are just 43. Yes, there are some major players and yes they do a lot of business. But in the war against banks it feels like Building Societies have lost heart and lost their way.
Now is the time to change all that. It is time for our Building societies to reassert their difference with confidence and pride. And it’s a golden opportunity to safeguard their futures by whole heartedly engaging with the new generation – the savers and borrowers of the future.
Building Societies were once the original pioneers, full of entrepreneurial spirit with a new way of doing things.
For that boy with his two savings accounts – it would be wonderful to once again see them get the recognition they deserve.
Written by Paul Houlding, originally published in Global Banking and Finance.
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