Mutuals bank on new ways to reach out in age of social media

The banks’ discomfort provides an opportunity for the mutuals, particularly if they are prepared to use technology to reach out to a new generation of consumers who don’t believe shareholders should come first.

Gone are the days when the only interaction with your local building society was through a weekly trip to the local branch with your account book.

The rapid growth of social media – such at Twitter and Facebook – and innovations such as 24-hour banking and paperless transactions have all been welcomed by the mutuals.

But there are words of warning for those who believe that technological investment is the answer to every question.

For example, Peter Myers, the chief executive of Beverley Building Society, wants to ensure that any technology-driven strategy mustn’t tarnish the brand.

“We’ve revamped our website in order to get the basics right,’’ he said “We want to make it accessible to people who experience the greatest difficulties.

“But it’s important to note that technology is fundamentally a facilitator. We’re dipping our toe in the water with Twitter and Linked-in.

“ If you leap in too quickly, you create a management overhead which it is difficult to retreat from.

“We don’t want to have a digital strategy that contradicts our core message of safety and security.

“Just because somebody knows how Facebook works, it doesn’t mean they understand the nuances around the brand and reputation. We can still make the face-to-face business model work.”

Tanya Jackson, corporate affairs manager at Yorkshire Building Society, also stressed that customers wanted to use many channels when dealing with their financial affairs, including face to face contact.

Under chief executive Chris Pilling, Yorkshire Building Society has started a five-year investment programme to enhance its products and services, which includes a commitment to technological advancement.

Yorkshire Building Society tries to keep its finger on the pulse of customer sentiment by using panels made up of its members.

“The message that comes across is that they want to deal with us in different ways,’’ said Ms Jackson.

Technological innovations, such as plans for video conferencing with customers and investment in a “responsive” website, are all aimed at making customers’ lives easier, she added.

Kim Rebecchi, the sales and marketing director at Leeds Building Society, said: “Technological innovations are changing the way we choose to interact with organisations. We are on a journey to improve the way we deliver our products and services.”

The iPad, which now seems ubiquitous, only went on general sale in 2010. According to Ms Rebecchi, this highlights the fact that building society’s must be flexible and monitor technological trends.

She added: “Clearly, smart phone and tablet growth has been exponential and, ‘on the go’ transactions and the use of social media are becoming the norm. Our members also tell us that they wish to deal with us across a range of channels, and that branches remain very important, especially for more complex transactions, such as mortgages, and where they are looking for advice. Even though technology increases reach, it will not replace the more traditional ways of dealing with financial services.”

According to Rachel Ramsden, the head of marketing at Skipton Building Society, technological change has placed customers in the driving seat, because it makes it much easier to compare services.

“We use the latest technology, like our online customer panel, to gain accurate insight into our customers’ wants and needs, to enable us to provide them with the most relevant possible products, services and communications,’’ she said.

“We send monthly e-newsletters to existing customers who choose to receive them, providing them with the latest information about the products and services we offer.”

Skipton also uses text messaging to inform customers about the progress of their mortgage or ISA account applications.

“People live busy lives where they need to be able to manage their finances in the most efficient way possible, when it’s convenient for them,’’ said Ms Ramsden.

“It also enables them to research and compare products much more efficiently before purchasing, and organisations need to recognise and keep pace with that. However, for us it’s about striking the right balance between the latest hi-tech tools and the personal touch. We believe the credit crunch has created a greater appetite than ever for people to be able to know and trust the organisations they deal with – financial and otherwise.”

Perhaps unsurprisingly, the Ecology Building Society, which is based in Silsden, West Yorkshire, has reported growing interest from younger consumers, who have become disillusioned with the major banks.

Under its chief executive Paul Ellis, Ecology provides mortgages for properties and projects which support individuals and communities who are adopting “green” building practices.

Anna Laycock, the communications and research manager at the Ecology Building Society, said: “We’ve been really successful in forming new partnerships through Twitter – it’s helped us to build relationships with other alternative financial institutions and with environmental and social campaigning groups.

“We see our social media channels as a way to communicate our personality and our beliefs rather than a channel for promoting specific products. There’s a lot of regulation around what we can and can’t say about financial products, which is very hard to comply with in the short space of, say, a tweet, but it’s not just about compliance: we just don’t see social media as the right place to be pushing products.

“Social media is about having a conversation, so we focus on issues that we and our followers care about, such as green building, reform of the financial system, affordable housing and fuel poverty.”