This week, the Nottingham Building Society (usually known simply as ‘The Nottingham’) announced it is to open seven new high street branches by the end of 2017, bringing its total to 67.
These new bricks-and-mortar sites, located across the Midlands, Cambridgeshire and Norfolk, will take over premises currently occupied by the Norwich & Peterborough Building Society, a brand that is being phased out by its owner, the Yorkshire Building Society.
The Nottingham’s expansion of its network of physical branches, which has more than doubled over the last four years, is an unusual move, given the more general backdrop of closures by building societies and banks, particularly in small market towns that serve a largely rural population. According to consumer champion Which?, more than 609 banks and building society branches in the UK will close their doors for good in 2017, bringing the total number of closures to more than 1,500 since the start of 2015.
Stampede to digital
The biggest culprit when it comes to these closures is, of course, the stampede to online and mobile banking – but just because The Nottingham’s increasing its physical footprint, that doesn’t mean it’s neglecting its digital estate.
In fact, it’s also just announced a ‘multi-million pound investment’ in digital technology, underpinned by a wide-ranging implementation of applications from Salesforce. Diginomica spoke this week with David Marlow, chief executive of The Nottingham, to get a handle on how that digital transformation journey is likely to unfold.
It’s all part of a wider strategy, he explained, to position The Nottingham, the UK’s ninth largest building society, as a trusted provider of financial advice to its membership. Beyond the classic ‘savings passbook and mortgage’ model of most building societies, The Nottingham already offers whole-of-market mortgage services to its customers, from a range of providers including itself. It also runs a residential estate agent business through its branches.
Over time, says Marlow, The Nottingham wants to attach membership to provision of financial advice and services across a whole range of areas, extending its financial and estate planning services in ways that demographic trends suggest that an ageing UK population will need. Today, much of The Nottingham’s advisory work is done face-to-face, in branches, he says:
And that’s OK for today, but clearly, if we look out ten years or so, there’s an expectation that the customer will want to receive that advice and service proposition not just face-to-face but digitally, too. So the challenge for us over the next few years is to develop a digital capability to match changing customer expectations.
This is why The Nottingham is currently recruiting digital specialists and planning its roll-out of Salesforce, alongside Salesforce partner CDecisions. The planned implementation, meanwhile, comprises three key phases.
First, The Nottingham will replace its existing digital capabilities – an e-savings platform and mortgage broking platform -– with new platforms based on Salesforce. This will give savings customers a faster and more efficient service when transacting on their accounts, Marlow explains, and give mortgage brokers placing business with The Nottingham a more modern and responsive system for faster turnaround times on applications. The Nottingham will also roll out Salesforce’s marketing campaign management modules across its business. This first phase is expected to take up until the end of 2018.
In the second phase, the focus is transformation – the delivery of an entirely new savings proposition that is currently in research at The Nottingham. The third phase will see the complete replacement of all front-end systems that the buildings society uses, with a view to creating a true ‘omni-channel’ experience, says Marlow.
You might, for example, begin a process such as a mortgage application online, then switch to a video call with our call centre, before booking an in-branch appointment for more in-depth advice, and then finally complete your application on your laptop at home.”
What we’re trying to do is create the perfect hybrid model. We don’t see it as being a case of in-branch or digital. We see physical presence still being important but we also see that having this digital capability will give us a much greater appeal to a much broader base of customers who will, at some points in their financial journey, still use our physical branches.
The timing of the second and third stages of the project are yet to be determined, says Marlow, and much will depend on the success of the first stage, which aims to get the core building blocks in place. In total, he anticipates the project in its entirety to take around three or so years.
I see my job now as being to communicate the changes well, to generate excitement, which is already happening, but also manage expectations – because when you generate excitement, people want things yesterday. But we’ll absolutely move as fast as we possibly can to reach our final vision.