A new report which reveals mutuals enjoy higher customer satisfaction ratings and are more likely to keep branches open than plc banks has been welcomed by Northern Ireland’s largest locally-owned financial institution, Progressive Building Society.

The report, endorsed by Secretary of State for Business, Innovation and Skills Dr Vince Cable MP, has been published by the Building Societies Association (BSA) to underline the importance of mutuals in the UK’s financial services sector.

‘Building Society – mutuals’ role in local economic and community development’ provides data to show that these organisations, which account for around a fifth of the lending and savings markets in the UK, are rated higher than banks by customers, have a long-term, tangible impact on local communities and offer the greatest geographical spread of branches of all financial institutions. 

The report showcases the work that building societies and other customer-owned lenders and deposit-takers do to engage with the localities and regions in which they operate.

It demonstrates that whilst many building societies and other mutuals have grown in size and developed additional objectives on top of their original purpose, they remain principally consumer-owned and community-focused finance organisations.

These values have helped mutuals score high recommendation rates with those who experience them on a daily basis; 79% recommend their mutual provider against 60% of bank customers.

Northern Ireland’s largest locally-owned financial institution, Progressive Building Society, was recently named as one of the UK’s most ethical financial institutions. Commenting on the report, Progressive Chief Executive Darina Armstrong said:

The publication of this report comes at a testing time for the financial services sector. From the recent EU fines for organisations involved in the Libor rigging scandal to the threat of closure hanging over local bank branches, it could be argued that the industry is struggling to maintain trust from its most important customers – the public.

At Progressive Building Society, we believe that the industry could start to rebuild trust in its major organisations by adopting what we’re calling the ‘mutual approach’.

The mutual approach is based first and foremost on who we provide financial services to, and support the communities of - the people who own us: our members.

As outlined in the new report, one of the major uniting features of building societies and other mutual organisations is that our support for the communities we serve is embedded in our corporate strategy, adding real value to the business.

Supporting local communities and economies was linked to the founding principles of consumer-owned financial institutions but remains what many of our members want and expect.

By being an important and active part of the community, mutuals can bolster member relationships, trust and loyalty. We can also use the insights gained from involvement with local communities to inform their strategic decisions, from distribution to mortgage lending.

Engaging with local communities is a key factor in the continued growth of Progressive Building Society. The organisation has grown from humble beginnings to become a leading force in the financial services sector.

It’s this member-focused approach that we believe can help the financial services industry rebuild trust with its customers during what we hope will be a positive and prosperous 2014 for all concerned.