Building Societies, like any organisation, need to keep up with technology to stay in business and satisfy customer needs.

67% of senior [building society] leaders see digital transformation as the greatest challenge to the sector

A report by Moneyhub Enterprise found that ‘67% of senior leaders see digital transformation as the greatest challenge to the sector for the next five years.‘ This suggests that a large proportion of societies consider keeping up with digital advancements to be a challenge and a hinderance to their organisation.

Following up from this, Moneyhub CEO, Sam Seaton, states that ‘the Open Banking opportunity for building societies can and will [help them] overcome their technology legacy issues whilst also gaining a competitive advantage over their peers.‘ This implies that Open Banking for building societies goes beyond just a singular opportunity, being a catalyst for further technological development and service provision.

The opportunity for service provision arises from the streamlining of key processes. These include capturing data, verifying and identification, approving or declining applications (mortgage, loan, account).

We believe that to maintain customer satisfaction through accessibility, and keep up with growing workloads, digital transformation must occur.


Technology Drives Regulatory Demand

Digital transformation is necessary to keep organisations running not just in their own competitive landscape, but through the changes seen globally through the pandemic.

Technology drives new regulatory demands that are impossible to comply to without innovation.

There are many ways that digital transformation can take place and with varying gains. Prioritising the reasons behind transformation can be difficult and driven by different aspects – regulatory compliance, consumer access, remote work, increased demand.

Building societies were responsible for approving 273,000 mortgages (35% of market share of all approvals) through quarter one, two and three in 2023. This proves there is a definite need to maintain productivity. Without digital assistance, organisations risk falling behind and becoming unable to provide services due to either accessibility or high demands.

Through digital transformation, building societies can improve their competitive position as well as the services they provide.

Retail Banking

Retail banking, or consumer banking, is the practice of providing banking services to retail customers (individuals and small businesses) instead of corporate customers (large companies and corporations).

Unlike most building societies, retail banks have been directly affected by the Open Banking regulation due to the services they provide. This means that they are a step closer to implementing Open Finance.

The benefits from Open Finance, are more applicable to building societies. This is due to their consumer base and the services they provide. Consequently, they will see advantages from Open Finance that were not achieved by building societies from Open Banking. 

Open Finance

Open Banking is about payments and payment accounts. Open Finance extends access to include mortgages, pensions, savings, insurance, direct debits, standing orders, and credit agreements.

Open Finance takes the idea of open banking a step further: giving consumers the ability to share access to all their financial data online. This could therefore make it more of an opportunity for building societies due to the nature of their consumer demographic and the services they provide.

The Financial Conduct Authority (FCA) outlined their vision for Open Finance, highlighting 3 main points:

    • Consumers and businesses – greater control over their data; engage with their finances to make better decisions; grant data access to third-party providers (TPPs) for greater access to products and services
    • Spur innovation – provide consumers with products and services based on their needs
    • Improve financial health of consumers and businesses in the UK

Financial products, including mortgages, pensions, savings, insurance, and consumer credit will be available to third party mobile applications. A customer’s entire financial footprint could be accessed and combined to deliver new and novel ways to use, visualise, and interact with their financial situation.

This benefits customers and organisations for a number of reasons. These include the ability to easily engage with financial products and more accurately make informed decisions based on the best options available for a certain customer. Visibility provided by Open Finance will empower customers to make decisions best for them and make the process of switching providers or getting renewals seamless.

On top of this, organisations will be able to conduct more accurate credit assessments and provide advice and financial support based on the information available to them. This will improve customer insight to their accounts and financial situation, as well as organisation security resulting from accurate background (credit) checks.

Points raised in the FCA call for input on Open Finance included that the ‘implementation of Open Finance should be proportionate, phased and driven by consideration of how consumers will use and interact with it‘. As of December 2023, the framework is now going through parliament in the form of the ‘Data Protection and Digital Information Bill’.

This means that any solution for Open Finance should be tailored to the needs of each organisation it is implemented in based on their consumer habits and services.


Whilst regulators became slightly relaxed throughout the pandemic by allowing organisations to focus on maintaining financial stability and operational resilience, the pressure will eventually return. As these regulation deadlines return, banking organisations will need to ensure they are compliant on time as to avoid prosecution and fines.

As Grant Thornton put it: ‘staying on top of the regulatory agenda will require agile governance and technology approaches.’ This highlights the need to develop digitally in order to maintain consumer satisfaction and to stay compliant.

Responsiv make decisions easier.

Responsiv can help in removing some of the stress from digital transformation projects by taking on responsibility and removing the need for in-house resource reallocation and disruption.

An example of how Responsiv can help maintain regulatory compliance in building societies is through the automation of business processes. By automating processes, organisations reduce the risk of incorrect data, security breaches and misuse of data, as well as improving productivity and cost-effectiveness.

To put this into context, a building society has managed to fully automate the end-to-end mortgage borrowing process. Within 24 hours they can onboard new brokers and networks and have seen an increase in mortgage applications as a result. On top of this, there is the potential for them to automate and optimise around 170 business processes that fit the automation criteria.

This is just one of the ways that Responsiv can help to implement and maintain regulatory compliance and work towards digital transformation in ways other than Open Finance and Open Banking solutions.

Your journey to accessing an Open Finance and digital transformation future starts with an ideation conversation with Responsiv to flesh out ideas, consider the options, and decide the best course of action.

Get in touch today to find out how Responsiv can move you forward in your Open Finance Journey

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