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&#39Societies must give pledges to push mutuality message&#39

Building societies are being warned not to be complacent about mutuality

and to make themselves more relevant to their customers before they

complain to the Government.

Speaking at the BSA annual conference in Edinburgh last week, outgoing

chairman David Smith urged societies to come up with three pledges to

promote the benefits of mutuality and then take to the road to promote

them.

He said the key pledges which societies should aim towards are a

well-priced deal, a better service deal and a longer-term deal for

customers.

Smith believes societies can adopt keener pricing because they do not need

to pay dividends to shareholders.

He said societies have not exploited all their benefits to attract new

customers and this should be a key consideration. Smith told the conference

that societies should remember personal advice rates highly for customers

despite the take-up of financial services on the internet and that

branches, where possible, should remain open.

He said mutuals are in a much better position to understand and meet

long-term aspirations than a plc.

Smith questioned how many of the new lending initiatives will exist in 25

years, saying history has taught that enthusiasm wanes so “institutions

such as Egg might crack”.

The pledges should be easily memorised by staff, easily understood by

customers and mean something in terms of price and delivery, he said.

He urged senior executives to follow Nationwide&#39s example and hold

roadshows to convey their pledges through open meetings with members.

He said: “Building societies must not get complacent. Customer needs are

constantly changing. But let those who run the anti-mutual websites be

clear on one thing – it is getting harder to convert a building society

against the will of its long-term members, borrowers and local

communities.”

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