The Impact of Regulation on the Strategy and Structure of Building Societies

A new Building Societies Act was passed in July 1986, radically changing the regulatory framework governing societies which had remained in force since 1962. The provisions of the Act allow societies to move into areas of activity from which they have previously been prohibited. At the same time that legislation was being passed specifically relating to building societies, the whole of the personal financial services market was experiencing what is generally seen as a revolution. Hence societies find themselves at a development crossroads at a time of great uncertainty. Although there has been much informed and some speculative comment, there has hitherto been little attempt at quantifying the likely future directions that building societies will take. This article seeks to remedy this situation by drawing upon the results of two surveys in which senior building society executives and their counterparts in other financial institutions were invited to give their views on the trends in personal financial services provision over the next five years.