This month we sat down with Sue Hayes, chief executive of The Nottingham, who succeeded David Marlow who held the role for over a decade. She joined the firm in January last year, and before that was chief executive of start-up GB Bank.
Hayes worked briefly at the Department of Health and Social Care, and before that spent around two years as the group managing director of retail banking at Aldermore.
Prior to that she worked at Barclays for over three years as managing director of premier and retail segments and savings products. She also spent three years as managing director of business banking at Barclays Corporate Banking.
Q: You have been the CEO of The Nottingham for just over a year now, what have the biggest challenges, learnings and opportunities been?
A: I haven’t worked at a building society before and so understanding the culture of a mutual has been really interesting. One of the things that drew me to The Nottingham is I like to do things that are both interesting and impactful.
Something I have observed is that there are some very good building societies who have focused on particular segments or diversified, but there are many that need a lot of modernisation and to be more relevant going forward without leaving their members behind and that is quite a difficult thing to address.
What I found with The Nottingham is that: it’s a great board, great colleagues and some passionate members. Some of the executive team when I joined were employed on an interim basis, so over the past 15 months I have been able to build a new team, retained some and moved people into positions where I think they’ll thrive.
My personal belief is if you have the right team, you can do virtually anything, and so we’ve got great people, a highly motivated, great board and great leadership team.
In April, we underwent a review of our strategy. Over the last couple of years, The Nottingham has not grown and it was focused on savings as opposed to lending. So, we did a full review of The Nottingham, the industry, and the market and then looked at the best options to win over time.
We’ve developed a strategy that we believe we can implement in the next three years and that will be relevant for decades. We’ve developed a purpose which we believe is fully in-line with the mutual ethos, and it can be much more modern and relevant to future generations.
Going through that whole process has been a real delight, and I’ve met lots of members, intermediaries of brokers in that process to get their feedback and I think we could do some really interesting and differentiated things for them as well.
Q: How is The Nottingham different to the other places you have worked e.g. GB Bank and Barclays?
A: I think the financial services industry generally is trying to be more purposeful. I’ve been in the sector for a long time, and I think purpose is definitely driving most organisations now.
However, it is different when you’re owned by your members and your customers. You’re able to take a more long-term view and have the responsibility of maintaining and building a really strong business that will last for decades to come.
It’s very different to a start-up bank because of the pace at which you have to run due to funding running out in a very short period of time makes it fundamentally different to a mutual that’s been around for over 170 years and has a strong heritage and capital base.
I think the main thing is that the firm is genuinely purpose driven and it’s always been purpose driven. That’s what Samuel Fox established over 100 years ago to use local people’s savings to help people to have their own home and to do good by the community. So, whereas other organisations are trying to move to be more purpose driven as a mutual, we have inherently always attracted people who are more purpose-driven.
Q: How do you see the current mortgage landscape and what are the challenges and opportunities for building societies in the next year?
A: I’ve been in the mortgage market for over 25 years, so I have seen a lot of trials and tribulations in the market, from the housing crash and emergence of negative equity in the 1990s to the financial crisis in 2008.
What I would say is that the market is now more volatile than it has been since the financial crisis, looking at Q3 and Q4 and the immediate impact of the mini Budget on the market I haven’t seen that since 2008.
I think the main thing is people will want to be able to buy and stay in their homes and that is the constant. For all mortgage providers it is their role to try to stay relevant and to be in the market for those people.
It is also important to look at innovative solutions for those who find it more difficult to get a mortgage as the workforce changes the ways in which it operates.
The fundamental thing is the way people work has changed and the mortgage industry hasn’t changed with that. What was previously a niche market is fast becoming the norm. People who don’t fit the mould of a traditional ‘standard borrower’. Someone who does not necessarily ‘tick all the boxes’ for one reason or another.
There is a real need for us and other building societies to look at the way people work and look at affordability. People will have more than one job, people are doing two or three jobs at a time. Many more people face fixed-term contracts as opposed to permanent contracts. Even doctors face this now, and that is difficult for some lenders. You have more people becoming self-employed, new job types like influencers, more over-50s setting up businesses and all of those borrowers need lenders to understand these changing needs.
Q: The Nottingham has been growing its team in recent months, which teams are you looking to grow and why?
A: We have been growing the lending team over the past few months. When I started the organisation was more focused on savings as opposed to lending so we have made some key hires to align with our change in strategy. This doesn’t mean we won’t look after our savers, but we will rebalance the needs of those who want to buy a home and the brokers who help them.
We have appointed Anthony Murphy as chief financial officer, hired Praven Subbramoney as chief lending officer and Alison Pallett as sales director. As well as Paul Howley as chief technology and transformation officer and Rudolf Heath who leads the operations area.
We are also growing our business development team over the coming months, having made a number of key hires already, to further improve the quality and depth of service we can offer to brokers. What we are trying to do is to put diversity of experience and expertise into the team to be the best we can be.
Q: What are your priorities for The Nottingham in the near and the long term?
A: We have made some great technology partnerships with data and credit agencies. We want to transform the process for house buying for those who find it more difficult. Partnerships are a key part of this.
The priorities for the short and long term are having great people and partnerships, which create truly brilliant and standout customer experiences and products.
Ultimately our strategy for the future is the reason our society was created, providing a safe place for people’s savings and using those savings to help those in need. Today, those are the people who need more flexible solutions to help them on to the property ladder. We are well-placed to deliver that.
Q: The Nottingham struck a partnership with Gen H? Can you explain the logic behind it, and would you partner with other newer lenders in the space?
A: How the partnership came about was quite interesting, I was talking to brokers and they told us about Gen H and what they were doing and recommended we look at them.
We met them and realized that what they are trying to do and what we are trying to do is very aligned. Initially we discussed launching some products on their platform, but the opportunity came up for a forward-flow arrangement.
The product is innovative and the use of tech, and the great service and reputation for doing the right thing by customers, make it a great partnership. It is a great way of funding a purposeful start-up which also allows us more space to deliver our own strategy and I couldn’t be more pleased with it.
There have been learnings on both sides too, for them around financial services regulation, and for us around fintech, so it’s been mutually beneficial in that sense as well.
Going forward, partnerships with like-minded businesses and people is a key part of our strategy.
Q: Regarding broker partnerships, what are the hallmarks of a good relationship and what should brokers know about The Nottingham?
A: In my view the intermediary is the heart of the mortgage market so any organisation that doesn’t realise that is missing the needs of the customer.
Customers still tend to choose a broker through referrals from family and friends, so for us the way which we can help customers is by working with and helping brokers, by offering great service to customers and ensuring we keep brokers up-to-date with information. They are key partners for us.
We know brokers want certainty and that they would like to speak to an underwriter. We are reviewing our journey designs to ensure the broker journey is delivered brilliantly.
Going forward our focus area will be looking at those who find it most challenging to own their own home. But as with any lender, we need to be great for lots of different customer segments, and that service and proposition excellence is key for us to deliver on.
As a smaller lender, personal service is key and we are building our strategy for the future on brilliant customer service and innovative products and propositions underpinned by data and technology.
Q: What do you think the future role of building societies is?
A: Most people don’t understand what a mutual means. I think we need to remind people about the reasons that building societies were set up in the first place and make sure we keep up with innovations in the industry.
We need to win for the reasons we were originally set up, our mutual ethos, but then combine that with an Amazon-type approach to service. We need to be able to move faster and better to meet customer and broker needs than our competitors.
Q: Female representation at senior levels is improving but there is still a long way to go, do you think the sector is making enough progress?
A: I’m proud to be a female CEO, and proud to see the number of other female CEOs in building societies as well as working alongside some exceptional senior women – and men – at The Nottingham.
The mutual ethos of building societies is attractive to female leaders. Having that culture and sense of purpose is important to ensuring better representation.
It’s great to see more opportunities for women in finance, but there is more that can be done.
Studies show that more inclusive and diverse senior teams reflect a broader range of views and experiences and help them make better decisions. Gender diversity is a big part of that but there are other forms of diversity we should encourage and strive for as well. Until we match the diversity, in all its forms, of the people we are serving, we can’t say we are there yet.
