I then challenged the audience – just as I had with the board of that Japanese insurance company. “Why,” I asked, “must customers take out a new mortgage when they move house?” By making this demand, building societies were forcing their customers to shop around and actively search for a cheaper alternative.
“What should we do instead?” came the inevitable riposte – so I suggested two possible paths…
Option One: offer a mortgage for life and then lend the customer more money each time they want to trade up, or…
Option Two: offer a fully-fledged home finding, buying, selling and moving service that, amongst other things, included the money necessary to buy the house of their dreams.
In this way, the building society would deliver the total ‘end-to-end’ solution and not just the means to that ‘end’.
I would like to report that these options inspired an animated discussion and a collective desire to rewrite the rule book – but they didn’t.
There was no ‘Damascus’ moment, just a polite round of applause matched by an unrelenting grip on the status quo.
A response that leads to one of two inescapable conclusions:
Either I should be fitted with a rather tight jacket and left in a well upholstered room or Building Societies are dangerously short-sighted. I’ll leave you to decide.
But let me leave you with this postscript…