Challenger banking must include mutual sector
The shadow MP shared his thoughts on the future for the mutual sector at the Building Societies Association annual lunch in London last week.
He said: “Whether it is from community banking, co-operative financial services or the credit union movement however we choose to do it we have to start to get that sense of richness of the different types of institutions because customers do care where their savings are placed and from where they borrow.”
That “richness” has been in decline for a number of years starting with demutualisation in the 1980s and 1990s and more recently since the start of the economic downturn in 2008 with mergers such as Yorkshire Building Society with Chelsea Building Society and Norwich & Peterborough.
The mutual sector is now dominated by Nationwide and Yorkshire which account for 73% of the sector’s assets.
The Co-operative Group is one such institution which is being named as a challenger to the major banks following its decision to acquire 632 branches from the Lloyds Banking Group which a spokeswoman confirmed was “continuing to make good progress”.
Leslie added that there had also recently been discussions about what can be done to reconnect financial services with particular regions and communities.
“The building society sector is so well-placed to lead that particular agenda particularly as so many of the mainstream plc banks have centralised and severed many of those face-to-face connections which used to exist with their customers,” he said.