There has been plenty of press comment over recent months on the merging of building societies.
Unquestionably the pressure on all financial institutions is increasing. Margin pressure is unrelenting, the tide of regulation from both Westminster and Europe shows no sign of abating and the pace of change in technology means that many customers now want and expect a multi-channel distribution option.
These pressures are significant challenges for building societies in general and for small and medium-sized building societies in particular. I believe that local building societies are important to local communities and it is vital that we think laterally to ensure that such organisations are well prepared for the future.
I believe the key to future success is the ability and the will for building societies to work together. There are a number of examples of this working well (which include our own subsidiary company, Newcastle Strategic Solutions). To date, however, collaboration is small scale as compared with what has been achieved in Europe, and particularly in Scandinavia. We need to grasp the opportunities but without threatening the independence of our fellow building societies.