The windfall fever has now declined. The recent decision by Helen Liddell, Treasury Secretary, that at least half the members of a society must vote on any question of demutualisation has put a damper on speculation.
While the spate of conversions has diminished, the argument for and against mutuality continues to rage on, with each side highlighting its respective benefits.
John Caine, director of corporate affairs at Alliance & Leicester, is particularly critical of his mutual competitors, claiming that they have double standards and inherent inefficiencies.
He says: "The first mutual was formed in a Birmingham pub in 1781 by teachers and clerics, people with a common bond. How then can a society with an objective to aid members be extended to include a million or more people from all walks of life? Just look at the changes and product available to the customer now compared with years ago."
He is particularly critical of Nationwide, the biggest remaining building society, after this summer's vote when a group of members tried to join the board so as to force it to demutualise. John Caine claims members were not given a real choice in their future. "Something like 350,000 people voted for a freelance butler to be on the board at the Nationwide. If the vote had been the option to convert or not, I guarantee many more would have voted to convert."
As for whether the societies offer the best deals, Mr Caine cites a recent survey in Your Mortgage magazine of 46 leading mortgage lenders, where Nationwide ranked 45th most expensive for the cost of a pounds 30,001 mortgage between August 1992 and July, 1997. He states that this is proof that mutuals are not always offering the best deals. Indeed, Alliance & Leicester, which converted to a publicly owned early this year, was the cheapest lender over that period.
Such surveys are offered to counter the battle cry that a mutual always offers the best deal. Yet, as with many such surveys, they do not always tell the whole truth. The early to mid-1990s was a period in which many societies felt no need to compete seriously in defence of mutuality.
Hence, deals on offer remained broadly the same across both banks and building societies. Over the past two years that has changed and it is likely - assuming present conditions still apply in two or three years' time - that mutuals will then be trouncing their banking rivals.
Ken Culley, chief executive of Portman Building Society and chairman of the Metropolitan Association of Building Societies, argues: "As a mutual, we do not have to pay dividends or maximise profits for the sake of institutional shareholders. This is unlike a plc."
Portman and other building societies have launched loyalty programmes for their members. Pay-backs are given in the forms of bonuses to long- standing borrowers and savers, depending on profits made.
Looking at life assurance, the leading mutuals such as Scottish Widows, Standard Life, Friends Provident and Equitable Life, have had a long record of being amongst the top performers for long-term-with profits endowment and pension policies. Not having to pay dividends to outside shareholders means that the members get the benefits.
The mutual financial service providers are using their capital structure and competitive strengths to try and convince customers that they provide the best deals in the marketplace, in terms of products, pricing and service standards.
These new strategies have had an especially dramatic impact in the highly competitive mortgage market. In 1996, building societies committed to their mutual status took a greater share of net mortgage lending than banks, converting mutuals and specialist providers combined.
A similar picture has emerged this year, with mutuals capturing a far bigger slice of business than they would seem to be entitled to. Of course, some of this is down to the expectations of many new members, particularly savers, that in the event of a future society flotation, they stand to gain from another free share bonanza.
None of this implies that the mutuals can afford to rest on their laurels. Some of the their largest competitors in mortgage, banking and insurance are looking to expand by means of mergers and acquisitions. Many new entrants, such as the supermarket giants, are coming on the scene. There is a continuing trend by the large institutions to offer an ever-widening range of products under one roof.
These developments are increasing competitive pressure and it is far from clear what the final shape of the financial services industry will be in a few years time. As a consequence everyone is trying to beef up their quality of service they offer customers, engaging specialist marketing consultancies to assist them.
Peter Rufus, director at The Red Partnership, just such an agency, says: "There is continual pressure to earn more revenue from existing customers. But revenue will only come from understanding the changing needs of customers.
"This means building relationships based on the way that customer wants to be served. The days when a prospective customer approached a bank or building society with cap in hand are a distant memory. The customer is now king."
Chris Holland, Bradford & Bingley's corporate affairs manager, admits that the mutuals occasionally get things wrong. But he adds: "Such instances are often outweighed by improving standards and a positive effort to learn from errors."
The importance of maximising customer satisfaction is recognised, especially when this can lead to new purchases. "A satisfied customer who buys additional services leads to better profits," says Mr Holland.
However, the future of the mutuals is in the hands of their savers and borrowers, who are demanding ever better service and products at prices that represent solid value. After all, without any obvious benefits, membership of a mutual society may feel no different to being a customer in a publicly- listed bank.Reuse content