The replies of the opinion survey of building society chief executives, published by the Building Societies Association today, shows a high degree of optimism amongst building societies' chief executives and a determination to meet the challenges ahead.
Many societies see their future in diversification and developing niche markets. Smaller societies see their size as a positive advantage; they are more easily able to adapt to customer needs and new market opportunities. Other societies see the Treating Customers Fairly initiative as a good opportunity to differentiate themselves from their competitors. One chief executive said that his strategy was to continue "to provide excellent service when so much of the competition fails to do so".
There are of course challenges. One building society chief executive neatly summed up the replies of many saying that "remembering to do business whilst dealing with regulation" was the main challenge facing his society in the year ahead. Another chief executive raised concerns about the 'one size fits all' approach to regulation urging the FSA to "tailor regulatory intensity to reflect real risks to the market".
Other conclusions from the survey include:
· The majority of chief executives did not think there would be a fall in the Bank of England Base Rate this year; indeed half believe there will be a slight rise.
· Levels of house price inflation divided chief executives, reflecting the regions in which societies operate. The most popular view (30%) was that house price inflation would settle at 0-2% by the end of the year.
· 75% of chief executive thought that savings inflows would rise or stay the same in 2005.
Adrian Coles, Director-General of the BSA, said: "I am encouraged by the many opportunities building society chief executives see for developing their business; Treating Customers Fairly, the Child Trust Fund, diversification and developing links with other mutuals and charities all featured among the replies of the vast majority of chief executives who were optimistic about the year ahead."
