Is the feeling mutual? Why mutual values are so sorely needed!

15 May 2024

Mike Russell

Written by Tim Bowen, CEO at Mutual Vision

When it comes to high street banking, Nationwide is famously proud to be different. It should be. Mutuals, Nationwide being the biggest example, act as a counterweight to their profit-gouging rivals. MV is equally proud of our mutuality — if slightly less famous, perhaps.

Our unique structure manifests in our commitment to the mutual ethos and enables us to collaborate with our customers, listen to their needs, and find solutions in a way that other providers can’t. We try to represent the alternative side of technology provision, occupying the same sort of philosophical space as, say, John Lewis or the cooperatives among people’s affections.

Since mutuals are owned by customers, employees or suppliers, they can do business in a different way. They can (and do) make a profit, but they’re able to share that profit less narrowly than just their shareholder base. They can plan for the long term, giving greater priority to looking after their people, the planet and the communities they serve.  Better treatment of customers is at the core of the mutual philosophy. The mutual benefit created by not having dividends to pay, means we can ensure they get better long-term value and better service from us than from other providers. Let us also not forget, building societies have been, and will continue to be, the innovators — the original crowd funders — the institutions that have brought some of the most creative products to the UK market.

Obviously, we have to take commercial decisions in order to operate as a modern technology provider that is able to thrive in today’s tough market environment and provide a real alternative to the larger, global consultancies ploughing their trade in the UK. But we are not hard-nosed. We remain committed to the values of openness, fairness and responsibility to our members and society.

We also work in a spirit of collaboration with our customers — which chimes with the ethos of the mutual movement — based as it is on Victorian values of self-help and community solidarity. We work with our customers to understand their needs and the requirements of the wider market.  Our customer base includes non-building society customers like Streambank and our collaboration with them ensures their needs are also captured and fulfilled, too.  We are proud to take input from our customers because we are not profit-obsessed.  Why do we do it this way? It’s not because we have to — or even because we are driven to do so due to our values — it’s because it’s the way it should be done. Collaboratively, alongside our customer base as their trusted partner — as well as their critical friend.

Many of our employees are steeped in mutual values, too, and this helps protect our ethical ethos. We have a product owner who’s worked for Nationwide and Yorkshire; our technical training consultant worked as a coach at Leeds; and Caroline Shard, our senior support analyst, worked at Vernon for 17 years. Our chairman, Stephen Mitcham, spent over twelve and a half years running Cambridge Building Society, served as chair of the BSA, and is still a non-exec of Progressive. We can talk the talk because so many of us have walked the walk.

I’m from a building society background, too; I joined MV having spent seven years running Penrith Building Society. I like to think I know more than most fintech CEOs about the principles of mutuality — and I hope the fact the board put me at the helm is evidence enough of MV’s commitment to it. Our hearts and souls are in the right place and the business is run ethically as a result. I want to protect the mutual sector. Right now, I think this is the best way for me to help: by supplying my customers, both new and existing, with banking systems and software that will help them to level the playing field and achieve their strategic objectives for the long term.

Mutuals tend to have a strong sense of social purpose, extending their impact beyond members. There has always been great public enthusiasm for businesses that do the right thing for society while also turning a profit. With the increasing interest in sustainable growth and the realisation in the wake of the credit crunch that some financial services institutions were not being run ethically, this has never been more true. The public is only becoming more interested in the environmental and social impact of business. Institutions owned by their members, and run along ethical lines.  The mutual ethos is in tune with the times. Public perceptions of business are shifting towards sustainability, social responsibility, and ethical sourcing — particularly among younger consumers. In a survey conducted by the Social Market Foundation last year, 54% of those polled said mutuals can make a big difference to society. The public sees the appeal of mutuality.

Even if we were to change our ownership structure tomorrow, we’d remain consistent to our mutual values. Afterall, what do we want the modern digital businesses to deliver? We all have different answers, but I’m sure most people would have a list that includes the creation of good jobs, affordable services delivered in a sustainable way. These are all things the mutual ethos helps deliver.

In a commercial landscape dominated by profit-driven giants, mutuals stand as beacons of a different ethos — one where values trump dividends. By putting customers, employees, and society at the heart of their business model, mutuals embody a commitment to fairness, to their customers, and to long-term sustainability. As the public’s appetite for ethical and socially responsible businesses grows, mutuals are uniquely positioned to meet these demands, delivering not only financial returns but also a positive impact on society and the environment.  In an era where corporate responsibility is becoming ever more important, mutuals offer a compelling alternative, proving that profit doesn’t have to come at the expense of principles.

Building societies have a long and proud history and MV is dedicated to advancing the legacy of mutualism into the future.

Tim Bowen | LinkedIn

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