Page 6: Conclusion
There appears to be no single structure that is ideal for a financial services organisation. It cannot be assumed that the most successful will be either the largest or the most diversified.
Some of the strategies which lay behind conversion have also been called into question by the potential for new organisational structures within the financial system. Internet banking is a good example. Technology is revolutionising bank processes so financial institutions do not necessarily have to operate through hundreds of branches.
However, building societies continue to come under a combination of pressures including:
- increased competition from non-traditional suppliers, for example, internet banks or supermarkets
- the challenge of the carpetbagger (individuals who see a way to make money by opening accounts in mutuals so that they will receive windfall payments if the mutuals convert into plcs).
Building societies are continuing to evolve to meet these new pressures. To deter carpetbaggers, some of them have raised the minimum balance requirements or demanded that new members live in a particular geographical area (or even occasionally stopped opening share accounts for new customers). Most large societies have now introduced charitable assignment clauses in their account opening documents so that, if the society converts to a bank, any windfall payment automatically goes to charity.