nCino sponsored the latest Whitecap Consulting Building Societies Report, surveying building society leaders to discover which trends are driving the industry.
Key Trends Reshaping Building Societies
The market remains highly competitive. To stay relevant and compete against larger banks with more aggressive pricing strategies, societies are focusing on specialist niches and developing innovative products. Continually refining technology, processes, and service delivery is critical because delivering an excellent experience for both members and brokers is key to retaining market share.
Technology modernisation has become a necessity rather than a choice. While many of those interviewed raised concerns about the significant costs associated with digital transformation, there is also significant cost associated with the upkeep of legacy systems. In 2023, it was estimated that 57% of total IT budgets were allocated to maintaining legacy systems, diverting funds from potential innovation.
While significant barriers to transformation remain, there's unanimous recognition that digital investment is essential to modernise the home buying process to create a more streamlined experience and attract a new demographic of members.
The report highlights how societies are investing in new technology, with the majority of tech spend being centred on increasing efficiency, improving customer experience, and customer acquisition. AI’s growing influence was a recurring theme across CEO interviews. Some societies are exploring AI for internal processes, while others are piloting broader applications like document scraping to enhance application processes.
Branches and Brokers: Redefining Omni-Channel Relationships
With a 9% decrease in total branch numbers since 2021, societies must determine how physical locations fit into their strategy. Interestingly, six societies have expanded their branch networks, recognising branches as community hubs and a source of competitive advantage in an era of widespread bank branch closures. Staff are now expected to handle a broader and more complex range of responsibilities, reflecting the shift towards more advisory, digitally integrated, and relationship-focused services.
The mortgage market remains predominantly broker-led, with building societies recognising the critical importance of intermediary relationships. While technology, such as robo-advice and AI could be considered a potential threat to brokers, members still value in-person advice on major decisions. Over 60% of survey respondents identified investment in intermediary-facing digital capabilities as a key focus area in the next 5 years. The broker channel shows no signs of diminishing, meaning enhancing broker experience is of strategic importance.
Success Story: How YBS Commercial Mortgages Transformed Their Lending with nCino
The challenge of digital transformation doesn't necessarily require a full-scale overhaul. YBS Commercial Mortgages, the commercial lending arm of Yorkshire Building Society, demonstrates the value of a targeted, incremental approach to technology modernisation.
Since 2017, YBS Commercial has partnered with nCino to enhance operational efficiency and improve both member and broker experiences. Starting with nCino's original Broker Portal, they've taken a measured approach to transformation that delivers tangible results while mitigating risks associated with large-scale change programs.
"nCino has provided us with a single customer relationship management system, transforming our operations," says Angela Norman, Interim Managing Director at YBS Commercial Mortgages. "With one unified platform, we've eliminated manual tasks, reduced operational risk and enhanced the entire end-to-end lending experience."
Currently, YBS Commercial is advancing their digital journey by upgrading their broker portal and implementing nCino's Mortgage Solution with new features that leverage the latest platform capabilities. This progression showcases how building societies can evolve their technology landscape in manageable, strategic steps.
Michael Wray, Head of Commercial Propositions at YBS Commercial Mortgages, notes: "The upgraded broker portal will enable us to offer brokers and customers a new digital means to interact with us and respond to market needs with efficiency and speed."
With broker-led origination and high broker dependency being the norm, broker portals are an ideal targeted opportunity for innovation that can simplify operational workflows, improve communication, reduce turnaround times, and strengthen the broker-member relationship.
Embracing the Future
The institutions that thrive will be those that effectively balance their traditional values with targeted technology investments, keeping experience at the centre of their strategy. The YBS Commercial example demonstrates how societies can transform their operations without radical upheaval.
Ultimately, the success of modernising lending lies in collaboration. Bringing together people, processes and technology providers, building societies can automate repetitive tasks, improve collaboration and allow skilled teams to focus on the high-value interactions – creating mortgage experiences that truly set them apart.
To learn more about how nCino works with building societies to create better mortgage experiences for their members, check out nCino Mortgage.
