Lloyds Banking Group: un-building society?
You know, there’s something rather unique about building societies. Think about the name. Building Society.
Unlike banks, with impersonal, often bored staff squinting out through bandit-glass screens, building society staff are part of the community. And that’s special.
On local high streets, they’ll wave to friends as they pass by, they share their customers aspirations, talk about when people get engaged, marriage plans or buy their first home. And customers send them thank-you cards and boxes of chocolates.
But all this sense of community, this colourful connection to the social network of everyday life is lost on the detached monochrome world of the Black Horse of the Apocalypse, LBG.
Run down and trodden underfoot
Lloyds Banking Group will close all 164 Cheltenham and Gloucester branches in November, removing the livelihoods of 1,660 good people and destroying over 160 years of history. Just to shift the value of a cost on their balance books. Emotive?
You bet. Because this is exactly the arrogant, short-sighted and frankly asinine behaviour that we’ve all come to deplore from our high street banks. Cost is just one side of the coin. Did the sub-prime meltdown teach them nothing?
A ready-made social framework. De-constructed.
Let me tell you a story. One that’s close to home, literally. My wife was once the manager’s assistant for a local building society that handled property services as well as mortgages here in Cheshire.
She helped people buy a house, find a mortgage, talking them through the biggest financial commitment of their lives. Sure she was taking money off them, but every week, she’d come home with a little box of chocolates, a little thank you note or a card. Why was that?
My wife’s experience wasn’t unique. It is echoed around nearly every little building society branch because they create a bond, a social connection with all the people they serve. That’s whey banks like LBG bought them in the first place.
Saving money or destroying an opportunity?
The savings gained from closing 164 branches is totally negated by the phenomenally high cost of integrating their current role into their fixed and inflexible wider banking process. They don’t tell their customers or their shareholders that, but its true.
Factor in the total loss of goodwill as people remember this savage act of corporate irresponsibility and I bet you find that this will save LBG nothing long term.
Welcome to Sir Fred Goodwin’s exclusive club
I hope that LBG’s head of retail banking, Helen Weir now realises that she is now likely to join RBS’s Sir Fred Goodwin as Britain’s most unpopular and anti-social banker.
With the recent MP expenses scandal demonstrating the power of society’s discontent it’s astonishing to witness the ill-considered timing of this act of corporate financial vandalism. She may be about to learn a hard lesson in the power of social networking…
And here’s a thought. I wonder how she bought her first house?
on June 18th, 2009 at 9:00 am
It is amazing to me that the banks seem to have completely forgotten why they bought building societies like the C and G in the first place. They bought them for the value and good will. Not just in rural areas where it was not practical to have a bank branch but in larger well established communities where the level of trust was higher for a building society than a bank.
You are right in saying it is the sense of community aspect that a building society embodies that a bank can never achieve even ignoring the current banking debacle. I can only hope that people remember what these banks have done and close their accounts and move to the Nationwide.
on June 18th, 2009 at 9:06 am
Thanks for your post, Bill.
I think you make a valid point. The banks bought the building societies because of what they offered, the revenue they drew in and the values they stood for.
In terms of cost, they were often run on a shoestring so the savings from closing them is small in comparison to the bad publicity generated from doing so.
Its crass, short sighted and typical of the knee jerk reactions we see. And also very sad for the people concerned who have lost not just a job, but a worthwhile and often deeply satisfying career.