Building Societies Lead Community Banking Revival Amid Digital Evolution

A Historic Sector Embracing Modern Changes

The building society movement, which began in 1775 in Birmingham, has been a cornerstone of UK financial services for 250 years. These institutions, founded on principles of mutual trust and collective responsibility, have consistently prioritized their members’ interests while fostering shared prosperity.

Current Landscape and Transformation

The Building Societies Association (BSA) currently represents 43 UK building societies and 6 credit unions. According to the Building Societies Report 2025, the sector has demonstrated strong performance in recent years and is expected to continue growing as it navigates through a period of evolution and modernisation.

The sector is at a crucial juncture, facing the challenge of balancing traditional values with modern demands. Building societies must adapt to digital-first convenience while maintaining their core principles in an increasingly volatile economic environment.

Strategic Developments and Innovations

While many traditional banks are closing branches, building societies are taking a different approach by maintaining their physical presence while evolving their branch roles. These branches are being transformed into multipurpose spaces that combine operational functions with customer-facing services, and many are being converted into community hubs. Some societies are even implementing multi-bank kiosks in their branches to facilitate various banking services.

The sector has received significant government support, with plans to double the size of the mutual sector. This initiative reflects growing recognition that building societies, with their commitment to financial inclusion, play a vital role in creating a fairer economy.

Future Outlook

The future direction for building societies is clear: they must evolve to maintain their position as community anchors for the next quarter-millennium. This evolution includes embracing new technology that amplifies their values, developing strategic partnerships to extend their reach, and educating younger generations about the benefits of member-owned finance.

With supportive government policies and a shifting financial landscape favoring mutual institutions, building societies face both challenges and opportunities. Their success will depend on their ability to implement new core technologies while maintaining their distinctive member-first approach.