Transform’s research into the UK building society sector tested 22 factors that drive online customer experience including information presentation, online sales, service channel integration and digital innovation. Our findings reveal that the UK’s building societies are delivering an online customer experience that fails to keep up with the demands of today’s consumers. Analysis of the online CX of all 53 building societies in the UK found that less than half (47%) enabled customers to purchase products online and many are struggling to get the basics right. Online search tools are delivering poor results for the majority of building society websites (80%), in one case the top result for the search term ‘savings’ was about the proximity of airport parking to the society’s head office. And although smartphone penetration is at almost 75% in the UK, only 15% have optimised their websites for mobile. Originally great innovators, Transform’s research illustrates that building societies aren’t embracing the opportunities provided by digital. Despite a growth of 430% in the Peer-to-Peer finance market between 2011 and 2013, the modern day equivalent of the mutual principles on which building societies were founded, no building society has entered this market. The top three performers in the study were Nationwide (16/22), Yorkshire (14/22) and Saffron (14/22). Cheshire. The Saffron Building Society is around 190 times smaller (in terms of total assets) than Nationwide, demonstrating that good, customer-centred digital performance does not require corporate scale.

1. Digitally Mutual 2014
RESEARCH INTO THE ONLINE CAPABILITY OF UK BUILDING SOCIETIES

2. Why?
WHY THE DIGITAL CAPABILITY OF BUILDING SOCIETIES MATTERS

3. 3
As citizens we need challengers to compete hard against
high street banks
“Banks in the UK have failed in many respects. They have failed taxpayers who had to bail out a
number of banks … with a cash outlay peaking at £133 billion, equivalent to more than £2,000 for
every person in the UK. They have failed many retail customers, with widespread product mis-selling
… They have failed in their basic function to finance economic growth, with businesses unable to
obtain the loans that they need at an acceptable price.”
Report of the Parliamentary Commission on Banking Standards, 2013

4. 4
To compete with banks, building societies must master
digital services
50%
Online is now the primary way that UK banking
customers transact.
Research suggests that three out of five online
banking customers use online banking at least once
a week.
Customer loyalty may also correlate with online
usage.5
online banking users4
30%
Building Societies will
soon run out of non-
internet using
customer/members.
Only 13% of British
adults (6.7 million
people) has never used
the Internet.
35.7 million British
adults use the Internet
daily.
non Internet users2
2007 2013

5. 5
But most building society websites are not transactional,
usable or innovative
15% 0%
47%
MOBILE FRIENDLY?
The
majority of
Building
Societies do
not sell any
products
online.
28%3
of all
Internet
traffic is
mobile. But
only 15% of
building
societies a
mobile
friendly
website.
No UK
Building
Society has
launched a
digitally
innovative
product or
service.
Only 20% of
Building
Society
websites
offer fully
usable site
search.
BUILDING SOCIETIES HAVE LOW
LEVELS OF DIGITAL CAPABILITY
Less than half of building societies provide a
transactional website.
Only 20% provide site search that is usable and
meaningful to help member/customers find what
they need.
Only 15% provide a website that is usable on a
mobile device.
No building society offers any truly innovative
digital product or service.
ONLINE PURCHASING? USABLE SITE SEARCH?
20%
DIGITAL INNOVATION?

6. Findings 1
THE DIGITAL EXECUTION GAP IN THE BUILDING SOCIETY SECTOR

7. 7
We tested how well building societies use digital to meet
basic customer needs
DIGITAL MATURITY
BENCHMARK
4
Our Digital Maturity benchmark is a simple
test of how an organisation uses digital to
meet customer needs – for basic information,
sales, service, etc.
A website is shaped by the culture of the
organisation that made it. Efficient code
can be written in a silo. But it’s harder to get
marketing, product, legal, compliance and IT
teams to work together for coherent
customer outcomes.
Digital Maturity is a simple test of how an
organisation has embraced digital to meet
customer/member needs.
CUSTOMER-CENTRIC DIGITAL
BENCHMARK
PRESENTING
INFORMATION
ONLINE
SALES
ONLINE
SERVICE
CHANNEL
INTEGRATION
DIGITAL
INNOVATION
1
2
3
4
5

8. 8
Digital maturity tests 22 factors that drive customer
experience
PRESENTING
INFORMATION
ONLINE
SALES
ONLINE
SERVICE
CHANNEL
INTEGRATION
DIGITAL
INNOVATION
1. Microformats for
easier display on
Google.
2. Information
architecture that is
logical and usable.
3. Responsive design for
better mobile
experience.
4. Compliance with EU
Cookie Directive
achieved through
best practice
mechanism.
5. Product pages are
clear & actionable
6. Site search works.
7. Social media
integrated on site.
8. Application forms
that are
downloadable.
9. OR application forms
can be requested by
clicking.
10. At least one product
can be bought online.
11. Many/most products
can be bought online.
12. Products can be
bought online by new
customers without
first setting up an
account.
13. Basic online account
for balances, etc.
14. Online tools and
calculators.
15. Online call back
requests.
16. Community polls,
forums or blogs.
17. Transactional mobile
app.
18. Channel transitions
from web to phone
can be made without
repeating
information.
19. Livechat can be used
for help and
information.
20. Single Sign-On uses
common identity
credentials across
channels.
21. Mobile app provides
helpful (non-
transactional)
functionality.
22. Uses Digital
capabilities to offer
innovative product or
service.
Building
societies
tested
52
Average
age of
building
society
Total
assets of
all
building
societies
tested
130
313
Number
Years old
£ Billions

9. 9
Digital maturity ranking
Owned by Owned by
Observations
• The top three are
Nationwide, Yorkshire and
Saffron.
• Nationwide and Yorkshire
control over 70% of sector
assets. But Saffron
controls just 3%.
• Nationwide and Yorkshire
have so far had limited
‘digital parenting’ success
with their acquisitions.

10. 10
Bigger isn’t always better
10 to 120 to 1130 to 2140 to 3150 to 41
1
Rank by Total Assets
RankbyDigitalMaturity
2345678910
• Joint first place in Digital Maturity was held by
Nationwide, Yorkshire and Saffron building
societies.
• Nationwide and Yorkshire are the largest building
societies. They jointly control 72% of the sector’s
assets. Saffron controls just 3% of the sector’s
assets.
• Skipton is the fourth biggest building society by
total assets but came in only joint 10th
place
ranked by Digital Maturity.
THE SIZE OF A BUILDING
SOCIETY DOESN’T DETERMINE
THE QUALITY OF ITS WEBSITE.
Punching
above
their
weight
Punching below
their weight
TOTAL ASSETS VS. DIGITAL FLUENCY™
BiggestSmallest
WorseBest

11. 11
Making it difficult for users to get the information they need
from Google
Micro formats
make it easier
for both
humans and
robots to find
and use web
information.
PRESENTING
INFORMATION
GOOD PRACTICE: use micro-formatted
data so that Google presents useful information such as
address of nearest branch, directions, local contact
number, opening hours and a status (e.g. “closing soon”).
of building societies do
not use good practice
BAD PRACTICE: Search
engine results that are not helpful to
members/customers. For example, few
people need to know when a society
was founded or the name of its CEO.
74%

12. 12
Usability on a mobile device is an issue. Mobile devices now
drive 28% of traffic.
GOOD PRACTICE: Use responsive
design so that the website adjusts to the screen it’s viewed
on. Smaller screens require reduced content and simpler
navigation.
BAD PRACTICE:
Squeezing a desktop-sized website onto
the small screen of a mobile phone.
This is simply not usable.
Responsive
design
gracefully
adjusts to fit
desktop,
tablet and
smartphone
browsers.
PRESENTING
INFORMATION
of building societies
do not use good
practice
85%

13. 13
A third of building societies fail to present sensible
structures to help members navigate their site
GOOD PRACTICE: A logical, mutually-
exclusive-collectively-exhaustive way of categorising
information on the site that is focused on the things that
users are most likely to be trying to find. This
information architecture should be universally available
across the site.
BAD PRACTICE: Includes
failing to break up menu into high level
product areas and misleading
categorisation. In the above example, a
“jargon buster” is not a “product”, even
though it’s listed in the “product menu”.
A logical and
effective
information
architecture
and menu
structure that
helps users
navigate the
site.
PRESENTING
INFORMATION
of building societies do
not use good practice
32%

14. 14
80% of building societies use site search tools that don’t
provide fully usable results.
GOOD PRACTICE: The top result for a
generic search term like “savings” should be a splash
page or similar that summarises the society’s savings
range at a glance and allows a user to click through to
the relevant product.
BAD PRACTICE: For a generic
search term like “savings” bad practice is
to present either irrelevant results or
results that are overly specific towards a
particular product or transaction.
Site search is
typically used
by between
2% and 15% of
users to find
information
on a website.
PRESENTING
INFORMATION
of building societies do
not use good practice
80%
Worst top search
results:
For the search term ‘savings’:
•‘airport parking’ (Hanley)
•‘about us’ (Furness)
For the search term ‘cash ISA’
•‘did you mean ‘cash is’?’
(National Counties)

15. 15
Over half of building societies don’t provide product landing
pages to allow product comparison at a glance
GOOD PRACTICE: Product pages should
give clear features, benefits and regulatory information
with a prominent call to action. Splash pages should
provide at-a-glance, scannable information about
products in the range.
BAD PRACTICE: The
example above is a product splash page
that does not provide scannable
information about products in the
range.
Site search is
typically used
by between
2% and 15% of
users to find
information
on a website.
PRESENTING
INFORMATION
of building societies do
not use good practice
53%

16. 16
53% of building society websites don’t allow members to
purchase even one product online
GOOD PRACTICE: To enable member/customers
to buy and manage many/most of the Building Society’s
products online. New members/customers should not be
required to set up an account before having completed a
purchase.
BAD PRACTICE: In the
example above, the Teachers Building
Society requires customers to print and
post an application form for its ‘online
savings account’. Many societies do not
provide any online purchase capability.
Online sales
conversion is
generally
lower if
customers are
forced to
open an
account
before
purchasing.
of building societies do
not use good practice
53%
ONLINE
SALES

17. Findings 2
THE DIGITAL INNOVATION GAP IN THE BUILDING SOCIETY SECTOR

18. 18
Building societies are accomplished product innovators
Affinity
Accounts
Clubs &
Associations
Client Accounts
Council
Accounts
Pension
Fund
Accounts
Credit Union
Accounts Individual
Accounts
BUILDING SOCIETY PRODUCT
INNOVATION IS STRONGLY
COMMUNITY-DRIVEN
Empty
Homes
Parental
Assistance
Self-
build
Refurbishment
Affordable
& Help to
buy
Local
reduced
rates
Affinity
mortgages
Shared ownership /
equity
• Building
Society savings
products help
gather and
retain assets in
local
communities.
• Building
Society
mortgage
products often
address real
community
issues such as
housing supply,
affordability
and
sustainability.
• Pricing is
frequently
better than
banks.

19. 19
But in 1775, building societies were the original Kickstarter
The first known building society was founded in 1775 by Richard Ketley, in the Snow Hill area of Birmingham.
Members paid a monthly subscription and lots were drawn to decide who got property first.
This radical financial innovation brought property into the reach of working people. But if Richard Ketley had
had the Internet in 1775, he wouldn’t have invented a building society. He’d have invented Peer-to-Peer
finance (P2P).

20. 20
Today building societies are missing the most significant
mutual finance innovation of the last 50 years at least
PEER-TO-PEER FINANCE IS
INHERENTLY MUTUAL
Peer-to-Peer Finance allows
businesses and individuals to
receive loans from a pool of online
savers.
Peer-to-peer is inherently mutual.
The UK is a world leader in peer-to-
peer. Despite this, no building
society has yet announced plans to
enter the market.
430% |
growth of
peer-to-peer
finance
sector, UK
2011-2013 7
But Peer-to-Peer Finance requires digital
capability to execute.

21. 21
In conclusion - time is running out for building societies to
exploit digital
• As citizens we need powerful challengers to banks.
• Building societies are the natural challengers.
• As financial consumers we expect a digitally mature experience; 50% of us regularly use
online banking and just 6.7 million of us are non-internet users.
• Building societies digital capabilities are, on average, of low quality; most worryingly less
than half of building societies enable online product purchases.
• Building societies are also failing to use digital technologies to innovate. No building
society currently participates in peer-to-peer finance, arguably the most significant
mutual finance innovation of the last fifty years.
• Digital deficits are likely to be caused by cultural and skills issues rather than by resource
gaps.

22. Transform
WHO WE ARE, OUR CAPABILITIES AND CONTACT INFORMATION

23. 23
About Transform
Digital & multi-channel consultancy, working
with clients to deliver customer-centred
change for commercial benefit
Bringing together experts with cross-sector
expertise
Innovation, creativity and rigour, to define,
design and deliver services relevant to a rapidly
changing world

24. 24
Part of Engine: 11 best in class agencies under one roof with
more than 700 professionals
Brand Consulting
Strategic &
Digital Consultancy
Advertising
Full Service Digital
Sponsorship Consulting &
Activation
Direct Digital Marketing
Consumer PR
PR & Public Affairs
Social Media
Experiential
Data Strategies
Digital Design

25. 25
What we do
STRATEGYSTRATEGY DESIGNDESIGN DELIVERYDELIVERY
M&AM&A
Channel StrategyChannel Strategy
Proposition
Development
Proposition
Development
IT Strategy & Planning
IT Strategy & Planning
Implementation Planning
Implementation Planning
Programme Delivery
Programme Delivery
Development
DevelopmentCommercial StrategyCommercial Strategy
CX StrategyCX Strategy
Change Management
Change Management
Innovation Execution
Innovation Execution
Digital CX
Digital CX

26. 26
What makes us different
• Customer-centred – innovation and
creativity, working with clients to deliver
customer-centred change
• Expert led – breadth of experience, depth of
knowledge, exploit best practice across
sectors by focusing on customer not product
• Fishing rods not fish – bringing the expertise
you need and sharing our knowledge
• With you not to you – working
collaboratively, recognising where expertise
is needed and how to get results

27. 27
Challenges we address
Customer insight – who
are our customers and
what are their needs?
Customer insight – who
are our customers and
what are their needs? Multi-channel
– how do we make it
feel integrated from
front to back?
Multi-channel
– how do we make it
feel integrated from
front to back?
Customer engagement
– how do we reach and connect
with the right people through
the right mix of channels?
Customer engagement
– how do we reach and connect
with the right people through
the right mix of channels?
Innovation & prototyping
– how do we quickly prove
our concepts?
Innovation & prototyping
– how do we quickly prove
our concepts?
Emerging channels
– how should we
leverage web, social
and connected TV?
Emerging channels
– how should we
leverage web, social
and connected TV?
Capabilities
– what do we need to
support our future
business?
Capabilities
– what do we need to
support our future
business?
Strategic planning
– how do we
respond to the
challenge /
opportunity?
Strategic planning
– how do we
respond to the
challenge /
opportunity?

28. 28
Experience and expertise

29. 29
Experience and expertise

30. 30
Simon Kirby, Transform Associate
simon.kirby@TransformUK.com
07973 395 329
Transform, 60 Great Portland Street, London, W1W 7RT
www.TransformUK.com
Connect with us: @TransformUK