This week, as part of our series diving into Building Societies and digital transformation, we take a look at the challenges Building Societies are facing in the current financial landscape and how digital technology can support them to overcome these challenges.
- Retaining and Expanding their Customer base
The traditional Building Society customer has historically been from older generations. Without innovation and adaptation Building Societies run the risk of the customer base aging out and not being replaced by the new generation of customers. The ability to deliver information and services through applications and the internet is key for customer engagement. It is important to note that Building Societies need to retain their identity. Millennials and Gen Z are the second most likely age groups to go in branch to check their balance, after the over 65s. These younger customers are also keen to seek out direct, face to face advice around investments and mortgages. It is important that Building Societies develop digitally, while retaining the human touch that makes them appealing to these customers. This can be achieved through implementation of a unified networking and security solution for all data, ensuring a seamless experience for customers from the branch, to remote services on the go.
- Innovation is starting, but is it quick enough?
Building Societies are well positioned to take advantage of the move to digital but digital transformation is taking place across the world of financial services. They have the trust of their customers, a solid customer base and the opportunity to move services into the cloud. What is the risk here? Customers are expecting all their user experiences to match so being able to use applications and the internet to check what on their finances is becoming the standard. Digital disruption in the mortgages and savings market has only just begun and the first movers in this space could quickly define the shape of the market to come. By taking the initiative and focusing on data analytics and application performance monitoring Building Societies can define these markets for years to come.
- Increased integration with fintechs and applications means more attack surfaces
Many fintechs are poised to help deliver innovation and new products to Building Societies customers. Newcastle Building Society has demonstrated this with their success in developing an application which analyses data trends to suggest debt solution products to relevant customers. This is an example of how partnering with a fintech company can provide additional services and value to customers but this also means planning around the fact there are now more points of entry on the network that contains vital customer data. Managing these points of entry, or attack surfaces, by unifying security and monitoring network traffic is key to ensuring Building Societies are still the safe bet for customers that they have built a reputation for being.
- Standardising InfoSec across multiple branches and remote workers
For the first time in 2021, it looks like life in the UK may be returning to normal soon. The same is not necessarily true for managers and bosses expecting their employees to be back in the office. Obviously some services, such as in branch consultation require physical presence in a place of work, however, more and more are asking for the flexibility of some time in the office and some time working remotely. This presents some potential concerns around information security as remote workers are now outside of the corporate network. While the GDPR does go some way to protect data in storage, it does not address the requirement for protection of data in transit. By developing a standardised and unified approach to InfoSec, sending data from one secure location to another is fully protected and secure. Sensitive information travelling through the internet can now arrive safely at its destination without the risk of 3rd parties viewing it while on its way.
- Partnering with the right organisations
There is a lot for Building Societies to navigate within the continued adoption of digital. There are fintechs which can help in delivering some services from the cloud to meet customer requirements, but there needs to be a focus on building some of these digitally native services in house and working with partners to implement a foundation which enables Building Societies to deliver a whole digital service, with end to end security and the capacity to deliver digital services quickly and effectively.
While there are certainly challenges to overcome both in terms of competition and the adoption of new technologies, Building Societies are able to leverage both their strength of their customer base and their position in the market to take advantage of a changing industry. A unified approach to cloud services will allow them to up the pace of innovation, offer secure and trusted services, and delight customers with excellent service, both in person and online.