You'll find these notes, along with the short videos, really useful to support a discussion with your team about our strategic progress and the role you all play.
Our Purpose
The Real Life we need to help
There are lots of challenges and risks for us to manage in the external environment, but there are positives too.
Alasdair Lenman, Interim CEO, talks about the need for us to be “…thoughtful and caring” and “…energetic and dynamic” in how we respond. AKA channelling We care about people and We make it happen! Click on Alasdair’s thumbnail (below) to view or watch it via the Chat Pack intranet page.
The wider economy
▪ The cost of living crisis is the biggest challenge facing the UK.
▪ Liz Truss’ new government has now responded to repeated demands to provide further support for households with an energy price cap that will freeze an average bill at £2,500 a year.
▪ Inflation (the rate of annual price rises) is currently over 10% and was forecast to hit between 13-20%+ in the coming year. Since the new energy price cap freeze, the hope is that it is now near its peak.
▪ To control inflation, the Bank of England (BoE) has raised interest rates six times since December, from 0.1% to 1.75%, with another rise expected on 15 September.
▪ The UK is widely expected to enter recession (at least two consecutive quarters of negative growth) later this year and it may continue well into 2023.
▪ Job secu
YBS and the savings and mortgage markets…
▪ Our members and customers tell us that they’re worried about the cost of living, but - unlike some in the UK - they’re generally still in a position to own a home or have savings.
▪ Our community / social activities continue to support the people who may not have this luxury – read more under Financial Wellbeing.
▪ Savers are starting to earn the highest interest rates in almost a decade, following the BoE’s rate hikes; yet rates still lag well behind inflation, decreasing the value of savings over time.
▪ There’s currently a record level of savings balances across the UK – the result of some people building savings during the pandemic. Although these are expected to reduce (as the cost of living bites) a sizeable and competitive savings market remains.
▪ Total YBS savings balances have not yet been significantly impacted by the cost of living crisis.
▪ The housing market continues to be robust. Annual price growth is slowing but remains in double digits.
▪ Mortgage rates are also rising with BoE hikes, making a place to call home less affordable.
▪ The homebuyers’ market is likely to quieten down as more first time buyers hold off and many borrowers are not keen to take on a bigger mortgage, but there are still ample opportunities for us to lend purposefully and support underserved borrowers.
▪ The product transfer / re-mortgage market is entering some of the busiest months for fixed rate maturities this year. Following rate rises, most borrowers will remortgage onto more expensive deals.
▪ Our mortgage
Helping A Place to Call Home Happen
We’re over £1bn ahead of plan for mortgage lending this year – a fantastic achievement considering our pricing and the market conditions. It’s because we’re perceived brilliantly in the market, and means we’re helping even more people have a place to call home.
Jeremy Duncombe, Director of Mortgage Distribution, talks about how the lending we’ve done is allowing us to get ahead of the game from another perspective. Click on Jeremy’s thumbnail (Below) to view; or watch it via the Chat Pack intranet page.
▪ We became only the third lender to launch 95% LTV (loan to value) lending on new builds – called ‘deposit unlock’ - and we launched a Boost LTI (loan to income) product. Both these purposeful products are targeted at underserved sectors of the market. Feedback from brokers has been really positive and we expect deposit unlock volumes to increase considerably as the government’s HTB (Help to Buy) scheme winds down from the end of October
▪ We’re constantly reviewing our affordability model, which determines how much we can responsibly lend to borrowers. Helping people have a place to call home can’t be at the expense of their financial wellbeing. And as interest rates and living costs both rise; we don’t want to lend people more than they can afford to repay.
▪ We’re forecasting future arrears levels (helped by Purposeful Analytics) to ensure we have enough resource in the Mortgage Collections and Recoveries Team to step in early and support struggling borrowers to keep their home. And we’re also specifically looking at how we could support borrowers on our SVR (standard variable rate) linked products.
▪ Our product transfer / re-mortgage business is performing well thanks to the Direct Mortgages Team and our monthly maturity pricing (MMP) approach – see Purposeful Analytics.
▪ We’re continuing to identify and eradicate pain points in our lending processes – both in terms of our processes and digital service.
▪ Our service levels have held up really well compared to other lenders, many of whom have really struggled. It’s again testament to our flexibility of colleague resource, working closely with brokers, and our MSO (mortgage sales and origination) system.
Helping Financial Wellbeing Happen
We know that the financial wellbeing of many people will suffer during the cost of living crisis, so our activity in this space is even more vital.
Alex Spragg, Interim Senior Manager - Social Purpose and Sustainability, talks about how we focus on both social / community and commercial elements to deliver this purpose ambition (see charts below). Click on Alex’s thumbnail (below) to view; or watch it via the Chat Pack intranet page.
▪ Our first ever friends and family fundraiser, YBS Fest, is on Sunday 18 September and raises funds for our charity partner, Age UK. The partnership enables Age UK to run the Building Better Lives programme, which has now supported over 3,000 older people to improve their financial wellbeing. Over 2,500 claims have been submitted, helping to unlock over £5.1 million of entitled benefits.
▪ Our award-winning Citizen Advice partnership across 17 branches and one agency has now helped almost 1,400 people. If they act on the advice received at their YBS-funded appointment, they could be financially better off by an average of almost £6,300 each.
▪ Over 2,500 unique users have now visited our new, online Money Minds platform. It’s a great financial education tool for young people, teachers, parents and careers. We’ll will be promoting Money Minds during UK Savings Week (September) and Let’s Talk Money Week (November). Face to face, we’ve delivered 430 sessions so far this year and reached over 10,000 young people, which is a 752% increase since last year!
▪ Colleagues have volunteered almost 4,000 hours so far this year – supporting a range
of causes that deliver on our Purpose. You can get involved with volunteering from the comfort of your own home with our remote volunteering opportunities such a mentoring for Refugee Action or helping older people with their digital skills through Click Silver.
▪ Read how our commercial activities support Financial Wellbeing under Savings Rebooted
Our Real Help with Real Life Purpose – in charts
We aim to support 500,000 people against each of our purpose ambitions: Place to Call Home and Financial Wellbeing…
Helping Member Value Happen
Our response to the BoE base rate rises and our loyalty products are setting us apart from competitors, and it’s thanks to the hard work of colleagues for supporting our trading, progressing our Strategic Blueprint, and delivering a strong financial performance.
Alasdair talks about how Member Value gets him out of bed in the morning. Click on Alasdair’s thumbnail (below) to view; or watch it via the Chat Pack intranet page.
▪ We’re at the top end compared to competitors when it comes to passing on BoE base rate rises to savers. We currently offer the highest average back book rate compared to all of our key competitors and the lowest rate on existing savings products is a generous 1.50%.
▪ Simultaneously, we’ve protected borrowers on products linked to our SVR (standard variable rate) by absorbing almost half (45%) of the BoE base rate rises. Almost all the big banks have passed on 100% of BoE rate rises to SVR borrowers.
▪ Latest stats show that our average savings rate (that’s not just loyalty rates) was nearly half a percent higher than the market average - equal to over £14m extra interest a month. We expect the difference to grow when the latest figures are announced.
▪ We’re close to introducing flexible interest solutions to pay higher savings rates on lower balances – giving most value to those who need it the most. Communications to almost 1.5m members mid-September.
▪ Customers and members are appreciating this value, as shown by our latest NPS of +52; now just two points below our stretching 2022 target.
▪ We’re looking at our colleague resource levels more wholistically across mortgages and savings, so that we can redeploy colleagues to support service pressures in other areas.
Our Priorities
Helping Savings Rebooted Happen
Since launching this priority, we’ve delivered significant improvements, attracted above-plan savings inflow, and launched purposeful products to support members’ financial wellbeing.
Chris Irwin, Director of Savings, talks about how we’re making this happen and thanks the teams involved in supporting our savings performance. Click on Chris’ thumbnail (below) to view; or watch it via the Chat Pack intranet page.
As we cover under Properly Personal Experience and Unbelievably Easy and Efficient, our savings members now have access to much-improved digital and self-serve options, making our products more accessible and appealing.
▪ As a result, our savings book has never been bigger, meaning we can support more ambitious lending plans to help more people have a place to call home.
▪ We’ve now launched eight Loyalty products, and opened more than 220,000 accounts, attracting over £4bn of balances. They’ve been available more consistently this year and have overperformed our trading expectations whilst receiving really positive member feedback and media coverage. The next produ
▪ All our products provide a home for people’s savings, but we’ve developed some that specifically support members’ financial wellbeing. These, more purposeful, products target people who have only limited capacity to save; with the aim of helping them build a regular savings habit. Yet, importantly, unlike some of our products, they allow savers access to their money without penalty.
▪ In September (19-23), we’re championing the first ever UK Savings Week, alongside the Building Societies Association (BSA). It focuses on the benefits of saving as a way for people to build up their financial wellbeing.
▪ Our savings business presents the biggest opportunity for the future, we can build our digital capability further, accelerate our strengths, and operate in new markets. We’ll be sharing more about plans in the coming months.
Helping Purposeful Analytics Happen
This priority has really shown its worth in a world that’s increasingly hard to predict! And we’re ramping up our investment in it to deliver even more in the future.
Amy Cookson, Interim Director of Balance Sheet Management, talks about how we’re further developing our skills, and the recruitment bringing some great opportunities for more colleagues to get involved! Click on Amy’s thumbnail (below) to view; or watch it via the Chat Pack intranet page.
▪ The monthly maturity pricing (MMP) approach that Purposeful Analytics enabled us to introduce is proving really successful, resulting in even fewer mortgage redemptions than we expected. More Keeping it Real discussion ideas…
▪ Which of our Behaviours are we demonstrating on this priority? We opened more than 63,000 Loyalty Regular Saver accounts to end August attracting over £40m Confidential 7 borrowers are staying with us when their mortgage terms ends meaning we don’t need to push as hard for new lending.
▪ We’re making progress to resolve the shorter-term IT issues that we mentioned in the last Chat Pack, hoping to have the majority sorted by the end of the year.
▪ And we’re looking at what we want to achieve in 2023, to get those objectives agreed early.
▪ Yet, as we’ve always said, this priority is a slow burn – it delivers bigger tools and changes over a longer period, rather than quick wins. So, our data and analysis to understand things like arrears, how new savings customers will behave, how rate tweaks affect trading volumes, BTL (buy to let) lending risk etc. is continuing; but we’re also reaching for better and looking to the future.
▪ We’ve started to identify what our data analytics infrastructure (the resources, data, IT platforms, skillsets etc.) needs to look like in the future, so 1- 5 years ahead. This longer term view will ensure we can get ourselves set up to make it happen.
▪ And our partnership with Leeds University will bring some great knowledge and awareness of what the future holds for data and analytics.
▪ Data and analytics skills are really in demand in the market, so getting the right people on board is proving difficult. YBS is investing in this skillset – numerous analyst roles have been approved – now the team just needs to fill them. A maths background is great, but by no means essential and you can work predominantly from home, so colleagues don’t need to live near one of our offices.
Helping Unbelievably Easy and Efficient Happen
Automating repetitive process, testing, and then rolling out slicker ways of doing things, and offering a better digital service, is making us so much easier to do business with.
▪ Our vastly improved digital services have transformed how we attract customers – three quarters of savers now come to us via our websites or app (which is now two years old!) compared to 10-20% just a few years ago.
▪We’ve made username recovery available via self-serve online which is expected to save tens of thousands of calls a year; and online password resets are set to follow soon.
▪ We’ve made it much easier for borrowers to make changes to their mortgage term, helping them manage their finances.
▪ All our branches now have a laptop along with bigger, upgraded monitors at least one of which is equipped with a camera, so that branches can connect virtually with colleagues across the Society.
Brian Reynolds, soon-to-be Interim Director of Retail Distribution, talks about how colleagues and customers are reaping the rewards of what we’re delivering on this priority. Click on Brian’s thumbnail (below) to view; or watch it via the Chat Pack intranet page.
▪Thanks to some big-volume processes being automated or enabled for customer self-serve, colleagues in Customer Services have more capacity to focus on queries that need a human touch. And, they’ve recently been trialling on-demand learning, including videos which can be viewed to fit around their role.▪ Branch colleagues have more operational flexibility and development opportunities. It’s thanks to new multi-site Branch Manager roles, the independence to develop local business plans that are tailored to Keeping it Real discussion ideas…
▪ What are our own experiences of this priority, either as colleagues or customers? 3/4 savers now come to us via our websites or app If you like numbers and are interested in a change of career, talk to Amy’s team! Confidential 8 the branch, and the opportunity to work in what were traditionally ‘head office’ roles on a remote basis, as a result of better technology.
▪ Customers are finding us much easier to do business with as there are lots more opportunities for them to self-serve. But if they do need to call, we can answer more of their queries more quickly, because we’ve improved our call handling times
Helping Properly Personal Experience Happen
Tina Hughes, Director of Marketing and Digital Channels, talks about just some of the ways we’re making this priority happen. Click on Tina’s thumbnail (below) to view; or watch it via the Chat Pack intranet page.
▪ We’re committed to making it easy for customers to interact with us in a way that suits them. For the majority who prefer to self-serve on simple tasks, online username recovery is proving a game changer and our improved ID and Verification with HooYu is now available 24/7 and on more products, including all our ISAs. By the end of the year, we aim to introduce it to Internet Saver Plus accounts.
▪ Our Retail Network is complementing our digital channels and ensuring we continue to offer that properly personal experience. For example, we’re piloting online account opening in branches, using iPads with customers to show them how it works.
▪ We’re reaching for better by using a team of around 100 colleagues, who are also customers, to test new self-service tools, before they go live. It’s an approach used by the likes of Monzo.
▪ Our websites are heading up the rankings on Google and other search engines, as they’ve all been migrated onto our new platform. It means they’re modern, stable, and agile, so more colleagues can edit, update, and improve the content much more easily.
▪ Our next biggie is to develop the facility for members to instantly fund their savings account with us, directly from their current account, using the YBS app.
Helping Your Strategy Conversations Happen – your feedback
This is a new-look Chat Pack. We’ve listed to your feedback and we’re testing the use of short videos for each section of the pack, along with a shorter, more visual set of summary notes, and no separate slides. It’s just a trial, so please do get in touch with your feedback!