LFP109 – Mutuals/Building Societies in the Digital Age w/Tony Prestedge Deputy CEO Nationwide

Nationwide is the largest Building Society in the world with 15 million customers, 1 in 4 UK households have an account, which makes over £1bn profit per annum and is entirely owned by its members (customers). If it were a company it would be in the FTSE50.

 In this wide ranging conversation Tony Prestedge discusses how mutuals see IT – its an interesting combination (to oversimplify) of “much as everyone else” with a very different flavour – an organisation serving just its customers and no shareholders has a very different ethos which runs through the discussion like a stick of rock.

Tony emphasises that the digital age presents an opportunity to bring the human being back into banking which complements the usual narrative that the more computers and less humans the better.

But what does this mean in practice – especially knowing that Tony lead a huge SAP implementation so is intimately familiar with the coalface reality of huge IT systems as well as the more digital face of IT?

He also shares with us which types of Fintech Nationwide would like to deal with.

Topics discussed on the show include: 

  • Tony’s perspective that gender diversity needs a more diverse involvement – especially of men joining the conversation
  • Diversity in the broadest sense brings something unique to decision making and should be the concern of the whole of society
  • “its not about quotas, its about open-mindedness of real difference”
  • the need for men to be inside the tent (of conversations about gender) rather than outside it
  • research that shows the more effort a society has made around gender balance the more imbalance one finds in “traditional” gender roles eg ratios of men:women in engineering of women:men in nursing are far more imbalanced in Scandinavia than in the UK despite the former having made far greater efforts to equalise opportunity. So how does one measure “success”?
  • when Tony joined Nationwide fewer than 15% of the senior leadership team were female; now 40%
  • the mentality of being owned by 15 million customers and being directly accountable to them
  • Tony led the largest replatforming of a banking platform in Europe “not something I’d wish to do again” 🙂
  • “how does technology start to bring people together rather than divide them?”
  • “for 25yrs technology has got in the way of having a conversation”
  • “the next 3yrs of technology are about bringing people together”…
  • …eg video where you can look people in the eye from any platform anywhere
  • …eg chat apps
  • Nationwide branches are equipped to serve customers in different branches in this way if needs be
  • connecting people through partnering with Fintechs – very much a human conversation to line that up
  • how to work with universities to start to bring through the next generation of tech talent
  • HT to the tribal aspect of social media per se, however at the one to one level it can connect for the good of Society and the society (the key aspect of how Nationwide perceives itself)
  • conversations are always necessary around matters such as buying one’s first home, organising pensions, saving for a car
  • sometimes matters can be automated and should be but when things go wrong it always requires a conversation with a human being
  • the impact of using video technology to connect branches to ensure a balance of members needs and available skillet around its branches
  • management interactions with and accountability to members
  • in the last 12mts Nationwide had the single largest democratic vote in the UK (!) re electing directors et al
  • Nationwide’s origins in the 1800s as a way of mutual savings and loans between people to help themselves
  • the wave of demutualisations in the UK which swept most Building Societies away
  • why aren’t mutuals founded today?
  • mutual behaviour cf mutual business constructs
  • the different time horizons of being an organisation which does not have short term stockmarket pressures
  • superior capital ratios than most banks; 75% of lending is on mortgages
  • over their history each generation of leaders has seen it as their role to hand the business over in a healthier state than they inherited it for the benefit of future generations of members
  • “a real sense of stewardship”
  • trends in social organisation
  • “we do it with a sense of social purpose”
  • “Alongside technology and health I do not think there is a more important industry than Finance” with examples of why this is true
  • rules versus individuals in the creation of the 2008 crisis
  • the deep connection between Nationwide and society
  • vice versa the risk of becoming slow paced, lethargic, not relevant
  • how do you serve the millennial group through to 80 somethings who still value traditional approaches?
  • MB: small disruptive Fintechs need to get their act together now that the big guys are all on the case with vast resources and reach
  • Nationwide’s interest in working with (invest/partner) with Fintechs and its Venture Fund
  • Nationwide’s requirements and views of the Fintechs which would fit best

And much much more 🙂

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