This year the annual Building Societies Association (BSA) conference again saw a number of high profile speakers from the UK and abroad.
Being staged only metres from the seafront on two of the hottest days of the year in Bournemouth, the delegates from across the industry managed to keep away from the beach and keep their attention firmly on the proceedings in hand.
Kicking off on the Tuesday morning and led by outgoing BSA chairman Matthew Bullock, also chief executive of Norwich & Peterborough Building Society, the topical issue of treating customers fairly (TCF) was heavily on the agenda of the first seminar.
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Speakers from both Nationwide Building Society and the FSA instructed delegates on the importance of customer care, both before and during the application process and also afterwards with the ‘post sale.’ As speakers instructed lenders to pay more attention to customers and ensure that business is retained, Nationwide Building Society’s executive director of sales and marketing, John Sutherland, instructed delegates that it was important to meet the needs of the customer and that if you meet their needs the more likely it is that they will stay.
In the same seminar, Clive Briault, managing director, Retail Markets at the FSA, announced the organisation’s review of TCF capabilities at the end of 2008, with an interim examination taken in March next year.
When asked how TCF will be judged by the FSA, Briault said: “People will focus on how to work things out for themselves, many companies already have customer satisfaction measures in place to show techniques and we have already seen some imaginative ideas such as mystery shopping themselves, surveying customers and checking staff behaviour. It will be a difficult challenge but we’re not going to insist on a way of doing it.”
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Delegates were also encouraged to consider customers not only before and during the application process, but also after. Bullock claimed that it was the responsibility of firms and consumers to be aware of customers after the mortgage process was complete. He claimed that at present there were too few companies dealing with ‘post sale’ and that there was no clear definition of what customers could expect to receive after the sale.
Bullock said: “The industry needs to address this, and lenders need to be aware of how serving customers will ensure that you keep them for the future. Of every 100 customer interactions between a branch and a customer, 96 are what we call ‘straight service’ where staff utilised the quality of follow-up service.”
In an echo of his speech at the Council of Mortgage Lenders lunch in April, Clive Briault instructed lenders to not only monitor their own products to ensure that they reach the desired recipient and is not oversubscribed to the wrong source, but that they should be prepared to look at post sales.
Paul Lewis, of Radio 4’s Money Box delivered a speech by telling lenders that the public doesn’t trust banks and this was their ‘big opportunity, you can make them unnecessary.’ He was also critical of brokers, claiming that there is a deliberate act of making mortgages so complex that buyers have no choice but to use a broker, and the cost goes up once again.
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Best buy tables came under fire, as Lewis claimed that some lenders altered their products in order to get a higher placing, while Sutherland said that the tables are misleading and that lenders should aim for a KFI style product. Briault agreed and stated that any other table would mislead if you didn’t take the time to read them, but part of their purpose was to get people to ask questions.
Later in the day, delegates heard about foreign markets from Friend First chief economist Jim Power, who talked about the strength of the Irish market, where house prices have risen by a reported 231 per cent and 93,000 houses have been built. Power also predicted that the base rate would rise to six per cent by the end of the year, but he added: “The UK housing market has got to slow down and I believe that it will.”
Cardiff Economic Consulting’s Michael Lea looked at the US market and with an outside view of the UK, he claimed that UK consumers focus too heavily on payments and are not sufficiently informed of the rules. Bill Schaub from GE Money focused on the market in Eastern Europe and pointed to the current migration levels from the EU of around 30 per cent and described mortgage space as a growing market.
Towards the end of the first day, David Smith, economics editor of the Sunday Times, pointed to the dilemmas likely to be faced by the Gordon Brown government, such as a house price crash, a rise in interest rates, first time buyers and the short supply in housing stock.
In his closing address to the conference, Bullock claimed that 2006 was a year of strong and well balanced performance for the sector and despite an increasingly difficult and competitive marketplace, he noted that building societies have improved their cost/asset ratios and increased their return on reserves, while retaining their market share in the mortgage and savings market.
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