Securing customers' interests through mutual ownership
A Nationwide case study

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Page 3: Creating a competitive advantage

Within a rapidly changing and highly competitive marketplace for financial services, organisations flourish by establishing a competitive advantage. This results from being different and distinctive in ways that matter to customers.

Nationwide emphasises that it is 'proud to be different' : this is its strapline. The challenge then is to demonstrate to customers that Nationwide is different in ways that really do matter to customers and which are to their great benefit.

The strapline message reminds Nationwide's owners and customers that its approach to business goes beyond commercial interests. The core of the business include a responsibility to members that enables Nationwide to offer services that compete with banks but at a lower cost because dividends do not have to be paid to shareowners.

Emphasising this link with customers is particularly important for Nationwide, as its customers are also its owners, known as members. Staying mutual enables such organisations to retain their ability to serve members in a way that these members clearly value. This includes offering services that are inclusive and local.

By contrast, those financial organisations that opted for demutualisation have to face the harsh realities of shareowners' requirements. To compete in the market place, many of these newly-formed banking organisations have had to reduce their cost base.

Measures taken have included reducing branch networks and maximising the use of technologies to provide customers with forms of service that require little or no human contact. These measure have also led to marked reductions in staff levels, including redundancies. By contrast, Nationwide has, to all intents and purposes, retained its branch network whilst at the same time developing its online services.

Nationwide | Securing customers' interests through mutual ownership