The Intermediary – August 2025 - Flipbook - Page 27
T H E I N T E RV I E W
SBS
close to their clients by enabling more digital
options. That has been the reality of the past
six to eight years. But the role of these building
societies to address the market in their own
way is crucial.”
While building societies have tended to
maintain their physical local presence, they
are still investing in automation and digital
processes to support efficiency and growth.
Most of this, Bierry explains, has happened in
ways that those outside the institutions might
not see or be aware of.
While building societies might still be seen as
“more old-school” when it comes to the digital
perspective, this is largely due to the focus of
tech advancement being in the back office,
where other financial institutions prioritise
customer-facing tech.
Looking ahead, however, Bierry warns that
this model must change.
He says: “That model is not going to be
enough for building societies. Many of them,
when they have less than £3bn or £4bn assets
under management will start to be too small to
stay independent.
“They have two options to stay independent
– to modernise and diversify to engage with a
larger client base and with more services, or
continuing to reduce their costs.
“Of course, many of the CEOs of building
societies are more business developers than
people aiming to just reduce costs. Also, just
reducing costs is going to put them on the
menu for consolidation.
“We don’t see the building society market
growing by itself – we see there being more
consolidation, because of the margins. But we
do also see that they are keen to find ways to
grow and diversify.
“That’s an opportunity for us to bring what
we are doing with banks across Europe and
give them that support.”
A factor further shaping the use of tech in the
building society market is that these lenders
are “not as much in competition as others,” and
while competition can spark innovation, this
allows them to “share many things” rather than
view progress as something to be coveted.
Broader picture
Looking beyond building societies to the UK
financial services market at large, Bierry sees
many opportunities for greater digital adoption.
He says: “Compared to European markets, the
UK market has a bigger appetite for digital and
the adoption of new models.
“When looking at the complexity of mortgage
business, the UK is the most advanced mature
market compared to many other countries in
Europe, so that appetite to move forward and
take risk is stronger. That’s a very important
differentiator.”
This could, in part, be due to the UK model
of shorter terms meaning a greater need for
tech and efficiency as people engage with their
mortgage provider, and potentially change
lender, more regularly. Bierry also adds that the
regulatory environment has a lot to do with it.
“The regulated approach is not seen as the
first driver for moving things forward in the UK,
unlike many other countries,” he explains.
“For example, faster payments has not been
a regulatory decision, and it worked here a lot
earlier than in other countries in Europe. In the
UK, we see the ability of the market to move
itself without waiting for the Government to
make the decision.”
Challenge of change
Whether a building society with 200 years
of history in a local area, or large financial
institutions with vast embedded systems, the
challenge is always going to centre around how
to evolve and adapt without taking a toll on
daily operations.
This is particularly the case when it comes
to processing platforms, says Bierry, as
engagement platforms tend to be less reliant
on legacy systems.
He continues: “On the processing side, it’s
very difficult for a bank or financial institution
to see the benefit and support the risk of
migration. That’s the first blocking factor.
“Their core business is not going to change,
so why take the risk and put so much money on
the table to make that move?”
Another hindrance to progress is the fact
that, historically, many financial institutions
felt they were differentiated in the way they
were going about providing mortgages and
savings products. This meant having systems
that were tailored to their business down to
the minute specifics. That, Bierry says, no
longer makes sense.
He says: “They must accept standardisation
– processing is processing, we can spend
tonnes of hours and not find anything that
really differentiates one brand from the other.
The differentiation comes in the way they
originate, engage, design the products, and
drive aftercare.
“There are many ways for financial
institutions to differentiate themselves, but
processing alone is not one of them.”
Of course, whether or not it is the right move
to standardise, migrating legacy systems is still →
August 2025 | The Intermediary
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