The GB team decided to think differently about their strategy for the race, instead of their strongest runner going last, they decided to place him first. This approach went against accepted wisdom of the time in relay racing, but it worked and the team came home with the gold medal.
Similarly regional building societies generally think differently to larger banks and this has seen the sector experiencing healthy growth during the past few years. So what is the different thinking that is driving this growth and can it be sustained in the longer term?
Simply, the majority of regional building societies keep their business boring. Pre the banking crisis, many larger organisations chased quick growth through half-baked mergers and poor lending decisions. Meanwhile Ipswich Building Society and other regionals focussed on prime residential lending within our local areas; managed risk sensibly and looked for steady growth from our local brokers and members.
When the banking crisis hit in 2007, the whole financial services sector took some time to take stock, and it was building societies that came back into the mortgage market and started lending again. Now six years later, we are still seeing banks repair their balance sheets whilst building societies who looked after their capital continue to lend and prop up the mortgage market.
Being a building society does not automatically provide you with a halo. All financial organisations require strong and expert leadership, a healthy attitude to risk and governance and a culture of looking after customers and brokers; recognising we need each other to be successful. A building society by rights of its ownership by members rather than shareholders has a good basis to ensure these behaviours are in place.
Regional building societies have remained focussed on lending that enables more people to own their own home. We have offered low deposit mortgages for the past two years, long before Help to Buy; and unlike the banks did not need this boot up the backside from government to lend to this group.
In the future it is unlikely that lending will become less complex, that capital requirements will reduce and advice ever more essential. Brokers and building societies working together offer this complete package and should see us compete with the big boys over the longer term.
Paul Winter is chief executive of Ipswich Building Society
