The mutual’s CEO, Will Carroll (pictured), sat down with Mortgage Solutions to discuss its vision for the future.
Carroll said Monmouthshire Building Society’s new chair, Marian Evans, had “injected a lot of energy into the organisation”, leading it to refresh its strategy and review its purpose.
The mutual is aiming for £5bn in assets, a growth from its latest figure of £1.72bn, which Carroll said presented “a lot of opportunity” around how to serve its customers and mortgage capabilities.
Part of this is Monmouthshire Building Society’s digital transformation in conjunction with MQube.
“We’ve embarked upon that transformation now, we’ve selected a new core software supplier as well as a new end-to-end mortgage capability system,” Carroll said.
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With the mutual being in its 150th year, Carroll said it had “ageing systems” that needed to be replaced.
“With ageing systems come ageing processes and inefficiencies within the business. We’re looking at doing our business in a different way and more efficiently so that we can enable the technology to really kick-start our growth capability,” he added.
He said this would include looking at all parts of the mortgage process, such as applications, assessments and completion.
This was not just about improving efficiencies, Carroll said, but “giving the best experience for our customers, whether that’s a mortgage customer, a broker or a savings customer”.
He added: “We want brokers to be able to submit their applications and have regular notifications, make contact with the mutual. In terms of the application, we need to make that as smooth as possible, because the broker, in the first instance, is our customer in the mortgage transaction.”
The mutual withdrew from the new business lending to focus on this update, and is looking to launch its new system to selected intermediaries in Q1 next year before rolling out in Q2.
Carroll said this journey had been “pivotal” for the mutual, as “it’s changing the way we think, it’s changing the way we work, and colleagues’ roles are changing”.
He added: “We, in turn, are looking at the way we think about doing business so that we can serve our members in the way that they want to be served in years to come.”
Sights set on growth
Carroll said the mutual’s £5bn asset ambition may be “challenging” when compared to its current position, but it was important to “aim high”, as this would bring about different ways of doing business.
He added: “We can look at what we want to do, how we’re going to do it and do we need to consider different lines of business? Do we keep the same, do we do more commercial lending or whatever that may be.
“Having that aspiration to grow is really exciting for our vision and making us think differently.”
Carroll said it was not a rigid target, but if the mutual only had a vision to grow marginally, it would not see any payback on the investments it was making, nor would this be inspiring to its colleagues or customers.
“If we can achieve all of that, the balance sheet will look after itself – dare I say it?” he added.
Carroll said the mutual’s short-term focus was its technology transformation, and he wanted this to be done “safely, but as quickly as possible”.
After this, the mutual will consider its capital base and its proposition with a view to expanding in all areas of business, including residential, buy-to-let (BTL), holiday let and commercial mortgages.
Carroll said the new mortgage system will enable the mutual to process a higher volume of applications than it currently does, enabling it to grow efficiently.
Monmouthshire Building Society also wants to align its growth with the industry’s aim to double the size of the mutual sector.
The mutual will need capital for this, but Carroll said it was hard to do this when the current business model was restrictive.
Consequently, he welcomed the introduction of the Strong and Simple Framework and Basel 3.1 regime around capital.
Carroll said: “The mood from the regulator is right in supporting growth. Whether it could be quicker in terms of advancing that, I don’t know. [What’s] key in terms of regulatory and structure for all building societies to grow is changing the capital framework.
“If we can issue capital in a way that enables us to grow quickly and sustainably, that will advance the aim of doubling the size of the sector.”
A local community mindset with a national vision
Monmouthshire Building Society has a reputation for being purpose-led, and this needed to be maintained, Carroll said.
He added: “We’re really well known for our personal service, we’ve got great broker appreciation scores… it’s really important that we retain that throughout the business, so we need to differentiate ourselves and continue to offer great service.”
Speaking of its broker wellbeing programme that was launched by its business development management team earlier this year, Carroll said this had been going “incredibly well”.
He said the events held at the mutual’s offices and externally were helping brokers to recognise the importance of wellbeing.
“For us to be effective as an organisation, our colleagues have to be able to perform,” Carroll said, which included the wellbeing of its broker partners.
More broadly, community is “intrinsic” to the way Monmouthshire Building Society operates, whether that is with its customers, broker network, or other lenders in the local area.
Carroll said this was shown recently, as the Monmouth area was flooded during Storm Bram, and the mutual’s branch was affected. The colleagues at the Monmouth branch joined the community to support people with donations, set up a pop-up branch in the library, organised a Christmas gift giving scheme, and got someone in from the charitable foundation to raise money.
Carroll said: “It’s that community [feel] that differentiates our business model because we’ve still got that personal touch. It’s been really appreciated by the community. It’s not just our branch that was affected – we will survive – but it’s a tragedy seeing those independent retailers in Monmouth who are now left struggling through the Christmas period, so any support we can give is really important.”
He said it was key to maintain this “local feel” even with the mutual’s national ambitions, adding: “We are very focused on the community, but that doesn’t mean we haven’t got the ambition to grow.”
Carroll said the mutual had “a lot of plans” to engage with brokers in the new year, particularly when its new system is implemented.
“Brokers will need to adapt to our new systems, so we’ll have people on hand to discuss the new systems and how to use them,” he added.
Carroll said it was an exciting time for the market, given the developments with technology and loosening of regulation, and “there are huge opportunities for businesses” and “it’ll be a good couple of years ahead”.
