Writing.

Ahead of the BSA Conference 2022 in Liverpool, we caught up with BSA chairman Robin Fieth to get his thoughts on technology, customer-centricity, diversity and inclusion, and sustainability.

Digital change, cryptocurrencies, and cybersecurity

Your recent articles have focused on technology, and the present challenges and opportunities that lay ahead for financial services. What does enthusiasm for change look like, and how might building societies capitalise and keep up with how fast things are moving?

Building societies and credit unions have been the trusted friend to generations of customers, and technology is supporting the vital role our members play within communities. Our members are using digital to transform how they deliver services, whether that's improving internal systems, digitising workflows, creating new distribution channels, or making it easier for intermediaries to engage with them.

At the same time, members are maintaining those elements that customers continue to value and trust, such as paper and card passbooks and branch networks. We continue to see innovation in our members' branch networks, with technology going hand in hand with the personal touch customers of all ages continue to value.

The UK may be lagging behind Asia in terms of digital currency development, but do you think the future looks bright for the future of banking and payments? How might this be an area that benefits lenders and members?

There has certainly been a surge in interest and development of digital currencies around the world by private companies and central banks. The Bank of England is looking at introducing a digital pound, but if this does take off, it will be many years away. Meanwhile, privately issued stablecoins and other cryptocurrencies are gaining popularity from consumers and businesses, with huge potential to disrupt the banking, payments and wider finance landscape.

The UK government's recent announcement that it would bring cryptocurrencies into UK regulation, and that it has even asked the Royal Mint to create a non-fungible token (NFT), is a clear statement of intent by the UK authorities.

We will be exploring what impact a digital pound and the rise of other crypto assets could have on our members' businesses and wider society on day one of the Annual Conference. There will be speakers from the Bank of England, Nationwide Building Society, and leading experts in the field.

How are building societies improving their cybersecurity credentials?

BSA members, like the rest of the UK, are on heightened alert for the possibility of cyber-attacks against the UK following the Russian invasion of Ukraine. Currently, the National Cyber Security Centre hasn't identified any specific threats, but has urged increased cybersecurity vigilance across all organisations.

Our members' response has been to focus on making sure that the fundamentals of cybersecurity are in place to protect their devices, networks, and systems. Having basic cyber hygiene controls in place, and functioning correctly under all circumstances, is essential, but critical during periods of heightened cyber threat. Members have also stepped up their monitoring of the NCSC's Cyber Security Information Sharing Partnership (CiSP) and Early Warning service, to receive intelligence on future cyber threats as they emerge.

Customer-centricity and community focus

How are members seeing noticeable benefits from a more customer-centric approach?

A customer-centric approach is part of the DNA of all building societies and credit unions, and comes from the core part of being a mutual organisation, which is ownership by your members. I've seen countless examples of this, with our members using technology to augment the founding mutual ethos, with digitalisation used to strengthen communication in branches or online, smooth customer onboarding, or using data to understand the needs of customers.

The community focus that comes from being a mutual is what makes the sector unique, and continues to resonate with customers, whether that's checking a savings account in an app or talking to in-branch staff.

Diversity, inclusion, and best practice programmes

Lorna Kerr of Principality BS recently said there was a programme in place to address underrepresentation, to develop external networks across the UK to share best practice with others. Can building societies take a prominent lead in this area over much larger financial institutions? If so, what do the ingredients of a typical diversity programme look like?

The answer to this question is an emphatic yes, of course! While larger financial institutions may well have the benefits of scale in terms of programmes to address these issues, the building society sector's collaborative approach means that it can absolutely take a lead. Building societies of all sizes are already sharing ideas, experience and good practice, and are developing programmes to ensure that they have an inclusive culture and foster a diverse workforce.

For many, the starting point has been a clear direction/expectation being set by the Board, supported by policy and development of ways to effectively measure progress. That could include a radical rethink and reshaping of recruitment practices, talent development programmes, and investment in understanding their current culture. Plus, putting plans in place to create the kind of culture they want for their business.

However, the work doesn't stop with colleagues. Many societies are also considering how their products and services stand up to scrutiny from a diversity and inclusion perspective. We can expect to see much more focus on diversity and inclusion from a customer perspective, too.

Sustainability, green finance, and energy security

What is green finance, and what are building societies doing in this area?

The building society sector is committed to playing a leading role in the provision of green finance to households to improve energy efficiency. Regulatory requirements already exist in the private rental sector, where properties must achieve an energy efficiency of at least 'E' in order to be let out. Over the coming years, these requirements are expected to ramp up, with the UK government's goal of upgrading as many homes as possible to EPC Band C by 2035.

Green mortgage products generally come in two forms: those where product incentives are provided to purchasers of highly energy-efficient properties, which is particularly useful in the new-build space, and those where incentives are given to borrowers to encourage them to improve a property's EPC rating.

Numerous building societies offer green mortgage products to both the private rented sector and homeowners, and the BSA is keen to ensure that product innovation in this space continues. One of our members is currently taking part in the Green Home Finance Innovation Fund pilots, working with Rightmove and RICS to track correlations between mortgage affordability and energy efficiency. We also welcome the announcement of further funding in the government's recent UK energy security strategy.

Looking ahead

What are you most looking forward to in your role as BSA Chief Executive over the next year or so?

What I'm most looking forward to is meeting everyone in person at what will be one of the biggest BSA Conferences for years. It will be great getting back out on the road again, meeting members, associates, and other BSA stakeholders.

I'm also looking forward to working with the current cohort of amazing students on the MSc Strategic Leadership programme, and leading our third delegation of current and future building society leaders on our exchange programme with cooperative and communities banks in Massachusetts.

There are also several topics which will potentially be transformational for our sector, and I'm excited to see these evolve. We will be discussing these topics at our Conference in May, which includes climate change and Net Zero 2050; HM Treasury's Future Financial Services Framework Review; the regulation of diversity and inclusion; central bank digital currencies and other stablecoins; and supercomputing to quantum computing.