It’s not a product problem. Building societies offer mortgages, savings accounts and member services that are genuinely competitive. It’s not a trust problem either. In a sector where trust is currency, building societies consistently outperform high street banks on customer satisfaction.
But customer satisfaction today does not guarantee customers tomorrow. And when you look at where the next generation is choosing to bank, the direction of travel is clear.
The numbers that should concern every building society board
Research from Moneyhub found that building societies command a 32% share of the banking services market in the UK. Among 18- to 34-year-olds, that share drops to 24%. The same research found that 73% of 18- to 34-year-olds look for an easy-to-use app when choosing financial products and that challenger and neobanks now hold over a quarter of market share in that age group compared to just 16% of the overall population.
That eight percentage point market share gap is not an anomaly. It’s a pipeline problem. Today’s 25-year-old is tomorrow’s first-time buyer, mortgage holder and long-term saver. If building societies are not winning that relationship early, the core products they are built around become progressively harder to sell.
The reason younger consumers are choosing elsewhere is not price and it’s not product. Moneyhub’s research found that challenger and neobanks position themselves as technology-first and without legacy infrastructure, are able to innovate at a quicker pace. Nearly half of existing building society members, 47%, reported difficulties engaging with their services, with digital experience cited as a frequent pain point.
The competitive backdrop
McKinsey’s Global Banking Annual Review 2026 puts the wider competitive context in stark terms. Mature fintechs have now claimed 17% of industry revenues globally, growing far faster than traditional banks and are actively seeking more. Neobanks have broken through what McKinsey calls the growth and performance frontier, rewriting expectations for what a banking experience should feel like.
The average number of financial institutions per customer has grown from 2.5 in 2021 to 3.0 by 2023. Customers are not necessarily leaving their Building Society outright. They’re layering other providers on top, which means the relationship is becoming shallower even where it persists on paper.
The operational gap
The gap showing up in those generational figures isn’t primarily about product. It’s about the day-to-day experience of interacting with a financial institution. Onboarding speed. Digital service quality. The ability to evidence that a member’s needs are being met proactively rather than reactively.
Most legacy CRM systems were not built to deliver that experience. Data exists across Building Society systems but it is fragmented, difficult to surface and harder still to act on at scale. Consumer Duty now requires societies to demonstrate, with evidence, that members are receiving fair value at every touchpoint. For organisations running on legacy infrastructure, producing that evidence consistently is a significant operational burden.
Challenger banks don’t carry that burden. Their systems were built to capture and surface member data by design. Creatio has AI agents embedded at the workflow level designed for vulnerability detection and Consumer Duty evidence, auditable and built for regulated environments in a way most legacy platforms simply cannot replicate.
The fix does not require starting over
The assumption holding many building societies back is that closing this gap requires a multi-year, multi-million-pound core system replacement. It doesn’t.
Creatio’s no-code CRM and workflow platform sits alongside existing core systems, mortgage servicing, savings admin, branch platforms – without disrupting what’s underneath. First United Bank, with $1.9bn in assets across 23 branches, runs its entire platform with a three-person internal team. Neither replaced their core banking infrastructure to get there.
Independent research from Nucleus Research found that organisations moving from legacy CRM platforms to Creatio achieved a 37% reduction in total cost of ownership and went live up to 70% faster than comparable legacy implementations.
The 42 UK building societies collectively hold £648bn in assets and 29% of all outstanding UK mortgages.
That is a sector with genuine scale, deep member trust and a mutual model that puts members first.
Those are real advantages. But advantages only compound if the infrastructure behind them can support the experience a new generation of members expects as standard. The generational data is clear. The window to act is open.
The cost of standing still isn’t just financial. It’s demographic.
Salocin Group works with financial services organisations on data, CRM and digital strategy. We are an implementation and advisory partner for Creatio in the UK. If you would like an honest assessment of where your organisation sits, our free 90-minute CRM and data maturity review is a good place to start.
