The goal, he said, was to re-establish the society as a “proper local business”. Although he was given no specific mandate when handed the reins, his first step as chief executive was to analyse the image and effectiveness of the mutual and make changes accordingly, without undermining its original ethos.
He said: “We tried to establish what we wanted Dudley Building Society to look like and then went out implementing the strategies.
“Modernisation was a key part of it, whereby we took the good from what has been there for the past 156 years and tried to integrate that with what the members are looking for today. If you are going to attract a younger generation we need to do things slightly differently.
“We changed the branding, the logo, to bring it into something slightly more modern.
“When I took over, the profitability of the society had dipped significantly and we wanted to make sure the lending was well controlled. There has been a tidying up of our loan book and investments have been made into the company.”
Even though Mr Wood has been keen to attract younger members, he was also respectful of the society’s loyal followers. In the future he said he would like to create an online banking service to serve the growing number of internet users, before adding that postal and branch communication would always exist to serve the needs of others.
During his first two years in the role he also spent a lot of time with his new staff, who he characterised as a key part of the mutual’s image.
To help them understand the direction he wanted to take the organisation into, he introduced six core values for all employees based on empowerment, respect, innovation, responsiveness, community and commitment.
Different perspective
By introducing these values, he said the society could separate itself from competitors and promote a sense of challenging the norm. However, he was also keen to add that no brainwashing was involved, with the values serving instead to “inform the staff of what they might like to think about”.
The big changes that Mr Wood has so far brought in can to some extent be linked to his experiences working for bigger organisations. Although he accepted the limitations of working for a much smaller company, he added that his 20-year spell at Nationwide gave him a different perspective on how businesses are run.
He said: “It can be hard making the transition to something smaller because there were a lot more resources there. You cannot behave like larger organisations like Nationwide, obviously, but in many respects you still have got to be very clear about your regulatory requirements and involvements and you have got to make sure your customers are getting the right deal.”
Ensuring that customers are well-served is one of the key factors behind the longevity of building societies, particular as most struggled to compete with high street banks in terms of prices. Given Mr Wood’s experiences working for larger organisations, he was fully aware of this factor and the all-round importance of serving the local community.
As a local in what he described as “the manufacturing centre of the country”, his lack of time in the role did not mean a lack of familiarity with regional needs. One of his main objectives was to maintain the “strong affinity between Dudley and the society” and he was conscious that failing to do so would be disastrous for the mutual’s future.
He said: “It is difficult to compete with high street banks. I think, however, that there is a uniqueness to regional building societies that appeals to many.
“We cannot compete on prices with larger businesses, but we can compete very well on service. There is still a sense of mistrust in certain financial organisations, and I think building societies have maintained the trust of their members.”
Of its 33,000 members, Mr Wood explained that 3,000 are borrowers and 30,000 investors. Demand for saving products, he said, was currently very strong and bolstered by the fact that the society’s investment advice is outsourced to Legal & General.
Mortgages, meanwhile, were also increasing in popularity, although the mortgage market review has caused the society to rethink its strategy and outsource such advice to intermediaries. This was described by Mr Wood as a positive step that could potentially increase exposure of the mutual’s mortgage products to the entire UK.
Moreover, he was particularly confident that homebuyers appreciated the society’s customised approach and that this would help its products compete with the resource-rich mainstream lenders, who he said preferred to use an automated underwriting service.
He added that this was a major issue for the growing number of self-employed people in the UK, who tended to find credit hard to come by when lenders just “punch numbers into a machine”.
Help to Buy
Mr Wood was not so positive, however, on the Help to Buy scheme, which he said the society had opted not to join because the numbers did not add up. Furthermore, despite all the positive rhetoric about a resurgent mortgage market, Dudley Building Society’s chief executive refused to get too carried away.
He added: “Mortgages we see demand for, but it is not quite as buoyant as many are reporting. While the housing market is very, very strong and improving, the mortgage market has not caught up. The reason seems to be that one in three house purchases are cash only – especially in London and the South East.”
Instead of piling most of its resources into mortgages, which is often a popular perception of how building societies operate, Dudley Building Society decided to also offer alternative products to suit the wider needs of its local community. This included insurance products and will-writing services, though Mr Wood is keen to add more niche products when the right infrastructure is in place to do so.
Besides wanting to attract more savings, one thing in particular he hopes to create in the future is more lending facilities for people in their sixties. According to Mr Wood there has been a lot of demand from people of this age to obtain finance, yet not many options currently exist for them.
He said: “The market for financing people in their sixties has been shut off and we are therefore looking to develop responsible products in this area.
“Someone who is 60 these days will have a long retirement in front of them, so why would they not want to embark on new projects? There are a lot of people that age who are very active and with plenty of years ahead.”
After just two years at the helm of an organisation that has been in existence for almost 156 years, Mr Wood has wasted no time devising plans on how to drive his local building society forward into the future.
Daniel Liberto is a features writer at Financial Adviser
Key points
* Radical changes to modernise the 156-year-old mutual have included investing in IT and refurbishing its six branches.
* Demand for savings products, are currently very strong and bolstered by the fact that the society’s investment advice is outsourced to Legal & General.
* There has been a lot of demand from people in their sixties to obtain finance.
