David Marlow

David Marlow, CEO, The Nottingham Building Society

The Nottingham bucks the trend

The Nottingham Building Society has doubled its branch network over the past five years at a time when bank branch closures are at an all-time-high.

The Nottingham has announced plans to open seven new branches in market towns across the Midlands, Cambridgeshire and Norfolk this year.

It also hopes to continue to open more branches in market towns, which it says often have very few or no branches of their own.

The building society believes strongly that branches can have a future if banks and building societies ‘reinvent’ their role and make them more relevant to the needs of customers today.

As many people find it increasingly difficult to access financial advice, help and service on key financial issues, The Nottingham believes branches can play a key role in addressing this problem. 

The new branches are based in Spalding, Stamford, Huntingdon, Bourne, Thetford, Dereham and Fakenham and are currently operated by the Norwich & Peterborough Building Society.

Its new branches will now offer a unique range of services – from savings products, whole of market advice on mortgages and financial planning, and estate agency services - and its new approach has been a great success. 

Footfall to its branches has also increased by over 10% in recent years. Around 78% of The Nottingham’s customers would also recommend it to others, which is around double the average for the retail banking sector as a whole.

The Nottingham’s research reveals that 75% of people say it’s important to have access to face-to-face advice in a branch, and if branches offered more services, 42% of people would visit them more.

The building society is now urging other banks and building societies to place a greater focus on reviewing the services their branches offer and making them more appealing.  

Also, for those planning to close further branches, it’s urging them to spend more time trying to find a competitor that can open new branches in their place, as Yorkshire Building Society has successfully done.

Following this announcement, since 2013 The Nottingham will have opened over 19 branches in locations previously served by a competitor.

This includes Santander, The Co-Operative Bank, The Derbyshire Building Society and Shepshed Building Society. Some of these have now become amongst The Nottingham’s most successful branches thanks to its unique model of offering a much wider range of services ‘all-under-one-roof’.

Over the past few years, The Nottingham has also transformed its branch proposition to offer a unique range of independent financial advice based services, meeting the needs of millions of people who find it increasingly difficult to access this.

The services include savings products, and independent whole of market advice for mortgages and financial planning. It also provides support and access to insurance, estate planning (funerals and wills) and a full estate agency service.

This approach has fuelled its recent strong growth - its total assets grew by 8.2% in 2016 compared to 2015, gross mortgage lending rose by 24% and branch savings have doubled over the past five years. Its workforce has also grown from 422 in 2013 to 717 today. 

David Marlow, chief executive of The Nottingham, said: “Around 26% of the country’s bank branches have closed over the past five years and as this trend continues our proposition becomes even more appealing and our business gets stronger. 

“Branch closures are leading to more people finding it difficult to access face-to-face advice and service when it comes to dealing with key financial issues in their lives. This is particularly true in market towns, where much of our focus is placed. Sadly, there are now as many as 1,500 towns in the UK that used to have branches but no longer do.

“Our unique ‘all-under-one-roof’ strategy of offering a wide range of building society and estate agency services to our customers through our branches has fuelled our recent strong growth and as more banks close their branches, we plan to open more.

“We opened seven new branch locations in 2016 and welcomed 24,000 new customers – many coming to us to use our advisory services as opposed to just taking out our savings products.

“It took 160 years for us to get to £1bn in branch savings balances, yet through the reinvention of our existing branches and the addition of new ones, it has taken under four years to get to £2bn.”

The Nottingham’s research also reveals that 84% of people still claim to use a branch, but 75% expect the rate of closures to increase over the next three years - 29% think it will do so ‘dramatically’. 

Some 63% of people think branches have an important role to play in terms of providing professional face-to-face advice for more complex financial transactions, and this helps explain why nearly one in three (31%) believe they could suffer from financial exclusion if their bank or building society branch closed.

More branch closures could not only make it harder for people to access financial services, it could also have a real impact on the wider community.

The Nottingham’s research reveals that 35% of people say they would visit their town or village less if their local bank/building society branch closed, and this could have ramifications for the shops and other services there. This is especially true for market towns where many don’t have any branches. 

Marlow added: “Expanding our branch network and widening our offering beyond that of a traditional building society is key to our success and growth. We look forward to welcoming new customers in the seven towns where we are opening branches and for them to become members. 

“We are very grateful for the opportunity to work with Yorkshire Building Society to maintain continuity of financial services to members of these communities, as well as providing redeployment and employment opportunities in the local economies.

“With around 260 branches and agencies in the UK they clearly remain strongly committed to a branch network model.”

Established in 1849, The Nottingham Building Society is now the ninth largest Building Society in the UK with assets of over £3bn.