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This article was first published in Society Matters magazine

Peter Neufeld is Partner & Head of Business Transformation, Innovation & Experience Design for Financial Services at EY

There is no doubt that the UK has faced a challenging macroeconomic environment in recent years – from COVID-19 lockdowns to high inflation and interest rates, both businesses and households have been impacted by cost pressures. These events led to many households dipping into their savings, accessing funds set aside for milestones like home purchases. 

While interest rate cuts are expected in the coming months, they will remain high for some time, meaning savings accounts continue to be a particularly attractive asset class for UK households. 
As we move further into the digital age, it's crucial for building societies to innovate and continue to offer compelling savings solutions to both retain and attract members. Here, we explore key areas where building societies can positively impact their members’ saving experiences.

1.    Educate first-time savers

Building societies are already purpose-led through their commitment to members and mutuality. There is an opportunity to take this a step further by educating more new savers on how to begin saving effectively. By demonstrating positive saving habits and helping to set realistic financial goals, building societies can leverage their member-focused ethos to foster a culture of smart-saving.

2.    Lead workplace savings

There is an opportunity for building societies to partner with local and regional UK businesses to offer employees innovative savings options. These collaborations – which could also involve third-party platforms and FinTechs – can harness the power of Open Banking and Open Finance to simplify the savings process from one pay cheque to the next, helping employees to achieve personal financial objectives.

3.    Connect across families

Building societies can also play a pivotal role by facilitating savings strategies across entire families. Our research finds that it often takes more than five years and assistance from family for first-time buyers to accumulate a mortgage deposit, so building societies can create tailored solutions to bridge the gap between young savers and the financial support of their relatives. This intergenerational approach not only helps individuals to save for a home, but also cements the role of building societies in supporting financial wellbeing across families.

4.    Embracing data to personalise solutions

Building societies are widely viewed as trusted, community-oriented providers, and as the landscape of Open Banking and Open Finance continues to evolve, members will find managing their finances with building societies more straightforward than ever. Even if firms don’t offer a transactional account, they can now gain deeper insights into members’ financial habits to offer more tailored solutions. However, it is imperative that building societies to continue to prioritise cybersecurity and fraud protection to ensure members’ data is protected.

Next steps

Building societies should now consider how best to implement these strategies, focusing on member education, workplace partnerships, family financial planning, and leveraging technology to enhance the savings experience while maintaining the highest security standards.

For more information about EY get in touch with Peter Neufeld