Good Morning All,
Welcome to my June Monthly Digest.
I hope this message finds you well, as we continue to navigate through the challenging circumstances we have now been operating in for over 3 months. I saw a quote recently that said “we are all in the same storm, but we are not all in the same boat”. This rang true with me, given that almost every conversation I have, both in and out of work, references the current situation to varying degrees. It seems we are all being impacted, but in many different ways.
Therefore, this update follows the same theme as last month, with the business as usual topics - savings, mortgages, network updates i.e. common interests that we all share, as we try to move in the direction of getting back to business ‘as usual’. Now, this may or may not be the case for those of you who have a non-YBS business yet, so with this in mind, we have also included some Growth Series content aimed at supporting this transition.
We’d love to hear what you think of these emails. There are some smiley faces at the bottom of this email you can click on to tell us what you think.
We’re also going to be sending a short survey to find out more about your views on both this email and our Growth Series content, so please look out for it in the next few weeks.
Savings
Last month I talked about the impact of a double BOE rate cut and a worldwide pandemic on the savings market, and how we had to adapt our plans accordingly. The savings market is still a challenging place to operate in.
Overall we’re in a good place. We ended May in a slightly better position than we thought in terms of balances. At £30.9bn, we’re about £140m better than we expected. As I have discussed with some of you, and you will have seen for yourself, we’ve seen branch & agency balances decreasing slightly. This was to be expected, and is mainly driven by the fact that customers can’t come in and deposit with us. We’ve got pretty normal levels of outflow, but the new money (which would usually replace this) has been, and is still expected to be, slower in the face to face world until it’s safe to open up fully. See my recent message on our plans to gradually do this.
More on Savings
Understandably, online volumes have picked up as a direct consequence of the restriction in face to face service and more customers having to use the online channel. This has again prompted some conversations, but we are confident that the service you provide will encourage customers to return to our face to face channels. This is backed up by some research published by KPMG which suggests that whilst 89% of consumers have interacted in a different way, only 8% are certain they’ll stick to their new ways of working.
After excellent retention rates in April, both May & June fixed rate retention remains ahead of where we expected to be. This is really positive and reflects the pro-active outbound calling activity we have enabled and your teams have undertaken to help you retain your customers without increasing unnecessary footfall at a time when safety is a priority.
Some of our competitors continue to cut savings rates (and some have even withdrawn from the market), so this outbound calling and any face to face contact that you have, provide a great opportunity to see if we can help our customers earn a bit more on the savings they hold elsewhere, helping both the Society, it’s Members, and of course your balances.
We had some really great news announced this week too - we’ve been awarded “Best Building Society Provider” for both Mortgages and Savings at the Moneyfacts Awards. This is a great achievement, and something teams can promote to reassure customers of the long term value of saving with YBS.
Mortgages
Overall, as you’d expect, the market in general was initially subdued compared to pre-Covid-19 times and generally YBS performance versus pre March 2020 was pretty much aligned to the market.
As mentioned last month, the re-mortgage market held up better than the house purchase market although now that physical valuations have re-started, and estate agents introduce social distancing measures for the house viewing process, we have seen the house purchase market start to recover somewhat. Some industry experts believed many would-be house buyers would wait to see how the market recovers, especially when we consider the potential impact on house values following the pandemic, but the market has quickly recovered to about two thirds of the pre-Covid-19 levels.
More on the mortgage market
It’s interesting when we look at Direct Vs Intermediary - Direct applications are accounting for 16.4% of the market compared to 22% this time last year. We continue to see more and more lenders re-enter higher LTV lending, and YBS is no different, meaning this higher margin lending will continue to become more and more competitive again. As a snapshot of both these trends, and as mentioned by Mike Regnier in his recent message, Accord received record breaking application volumes last week with a 90% product, a crucial market for us to provide Real Help.
Like savings, we’ve also seen a sharp increase in applications through the YBS website, which, when you consider social distancing rules, is no surprise as customers look for the safest way to apply for a mortgage. The Group has recently reforecast application numbers to take into account the impact of Covid-19, but in the Direct Mortgages Contact Centre we’re seeing increased call volumes and enquiries/calls are significantly above this new forecast. This is putting a strain on us, especially as we are still circa 25% down on resource. We continue to explore options to ensure we can meet customer demand, which includes upskilling branch-based Mortgage Advisers to take enquiry types traditionally only done in the Direct Mortgages Team.
Referral Agencies
This increased activity for the branch based MA’s to support the contact centre means that the planned MA engagement for Q2 which I promised in the last update has been postponed. We’re hoping their virtual visits will recommence before the end of year. Your teams can of course still generate leads and speak to your MA if required.
Introducer Agencies
We are currently putting together a guide for those of you who provide mortgage advice and are registered to submit mortgage business with us via the YBS direct brand. We appreciate that the variety of business you can submit via this channel is currently limited. However the purpose of this guide is to provide you with some documented support and guidance when applying with the YBS brand, and to outline what types of applications can be currently accepted via the different brands and channels. This document will be available on both our Intranet site and Agency SharePoint. I’ll let you know the date for the launch of the new guide in the near future.
Network Updates & News
In this unusual situation, we have been encouraging customers into Agencies for essential transactions only. From a marketing perspective, the focus has been on providing emergency messaging to reduce footfall, promote safety and communicate any reduction in opening hours (as well as providing support which can be found here to our customers during the Covid 19 outbreak). As lockdown eases then we aim to gradually welcome more customers in whilst still protecting our colleagues in the network.
We will be developing a new suite of ‘Always On’ posters around the theme of financial wellbeing. All the key messages support “Real Help with Real Life” and are customer led rather than product led - putting customers and their needs/lives right at the heart of it. These focus on the positives rather than the difficulties. There will also be a campaign when the Digital App launches and promotion material around our new charity partner. The timings on the launch of these will take into consideration what’s happening with the virus.
More Network Updates & News
Agency Council
We had to postpone the inaugural meeting of the council scheduled for 1st April. As it is looking unlikely we will be able to reschedule a face to face get together any time soon, I am looking at an alternative so that we can get this moving remotely. This will enable us to realise the mutual benefit and value I believe the council will bring. I will be in touch with the council members first in the next couple of weeks to discuss options, then advise the rest of you on how this has progressed.
Finally
From Wednesday 1st July we’ll be taking a complete break from any fundraising across the business until we begin our next partnership (which we’re hoping to announce very soon!).
As we come to the end of our incredible partnership with End Youth Homelessness, we wanted to end on a high with one last fundraiser together to smash the £1million target. You also have the opportunity to win some amazing prizes!
Here’s the link to the raffle – which is now live and will run until 5pm Tuesday 30th June, so be quick!
More on the prize draw and community updates
The Prizes:
1st iPad 7th Gen 128GB
2nd Garmin Vivoactive 4S GPS Smart Watch
3rd Sonos One SL Wireless Speaker
4th Pioneer DJ Smart DJ Controller
5th ION Air LP USB Wood Turntable with Bluetooth
6th Block Rocker iPA76A Wireless Rechargeable Speaker System
Also prizes for 7 runner ups including, five £25 Just Eat gift cards and Pact Coffee and Hotel Chocolat gift sets. Our prizes have been kindly donated by RSA, Pioneer, ION, Pact Coffee and Hotel Chocolat.
Money Minds
The current situation is also having an impact on our community activities. We were hoping to really focus on our Money Minds programme this year, so we have had to alter our approach.
As much as we would love to be back in schools delivering these sessions, we wanted to make sure that we can still help provide financial education to those that need it. We’ve created videos for our two most popular sessions:
Keeping Money Safe – https://youtu.be/zc4pQUnY8go
Wants & Needs - https://youtu.be/EvhtkHbF6HU
These online sessions have received great feedback from colleagues, customers, parents, children and school teachers as a great practical addition to current home schooling lessons. It has also received really successful figures (likes, shares etc.) on social media. Please feel free to promote this in your own channels, and engage within your communities. We’re currently working on phase 2 of the project, Key Stage 2 topics, and we intend to go live by the end of June. See the news article here.
Our Growth Series content is back!
As mentioned in my intro, this month, we’re focusing on tips to help those of you with a non-YBS business as we return to the new normal. I’m sure the vast majority of you will find something in here to help you. Go the blog here.
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