How Scottish Building Society Posted Record Savings Balance

Scottish Building Society, the world’s oldest remaining mutual, has recorded the highest-ever savings balance in its 175-year history of £490m (US$613m), up 17% year-on-year. 

The organisation's pre-tax profits are at their highest ever too, per Scottish Building Society’s annual report, at £4m (US$5m).

What’s more, its mortgage assets are up 8% year-on-year at £535.5m (US$669.8m), and total assets have risen 15% year-on-year to £740.7m (US$926m). 

But why now for this historic mutual? What has spurred this record-breaking year? 

How Scottish Building Society achieved record savings

For Scottish Building Society, its success today is due to a marked shift in savers’ habits, with trust more important than ever for savers when looking for an organisation to manage their finances. 

In recent years, banks have opted to scale back their in-person presence by closing branches in favour of digital-first services, in a bid to match the success of increasingly popular neobanks and digital banks. Global banks have also scaled back product lines in their digital shifts.

For mutuals, including credit unions and building societies, this has opened a window of opportunity. Savers favouring in-person services – or underserved sections of society that are not digitally enabled – have moved away from large financial institutions to use the services of local, more personable organisations. 

While many credit unions and building societies are leveraging digital ecosystems to modernise their services, most also remain committed to their brick-and-mortar presence and personal banking service. 

Nationwide is a prime example, recently committing to keep all branches open until at least 2028, and acquiring Virgin Money to scale its digital services. 

Earlier this year, Zur Yahalom, SVP and Head of Financial Services for North America at Amdocs said “2024 would prove to be the year of the credit union,” as they, alongside building societies, carve out a new way to compete with legacy banks.

Scottish Building Society is an example of a successful competitor, championing simple products and in-person services to achieve sustainable growth across the board with mortgage assets, savings balance and membership figures all rising. 

The building society operates six relationship centres across Scotland in Glasgow, Edinburgh, Aberdeen, Inverness, Galashiels and Troon.

Paul Denton, Scottish Building Society CEO, says: “These historic results are the accumulation of a near two-century commitment to providing fair and trusted support to our membership.

“As a mutual, we make decisions exclusively for the benefit of our members, not shareholders.  At a time when banks are looking to cut costs, we are reinvesting in what our membership tells us is important to them.

“This is why over the last year we have opened a new relationship centre in Edinburgh, committed to ensuring passbook accounts are available to anyone who wishes to use them and continuing our human-first approach to personal finance.

“These values have led our society since its inception and at a time when customers are reviewing who they trust with their finances, it is very encouraging to see more people come to us to support them in their journey.”

Scottish Building Society: A commitment to philanthropy

Furthermore, Scottish Building Society’s dedication to charitable endeavours highlights that consumers remain committed to institutions with local causes at heart.

Just last year, the building society marked its 175th anniversary with the creation of the Scottish Building Society Foundation, which is now set to distribute £175,000 (US$218,000) to philanthropic initiatives across Scotland.

Denton adds: “The creation of the Foundation has formalised our commitment to giving back to communities and in just over twelve months we have already supported good causes with over £60,000- from Wick to Galashiels.

“We are acutely aware that the economic conditions remain uncertain which is why we are doubling down on our values and are laser-focused on continuing to deliver for our members and the communities we serve.”

**************

Make sure you check out the latest edition of FinTech Magazine and also sign up to our global conference series – FinTech LIVE 2024. 

**************

FinTech Magazine is a BizClik brand.